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Currency Market Analysis

Oct 16, 2017 | Currency Market Analysis

Global Themes

Greenback falls to three-week highs after US CPI

We saw a big move in the USD on Friday as markets reacted to the US inflation figures.

The headline CPI number was 2.2% (versus 2.3% expected) with the core, which excludes food and energy, up 1.7% (versus 1.8% expected).

The USDSGD was pressured by the weaker than expected US inflation numbers as US bond yields eased.

Friday’s move –down 0.2% -- pushed the USDSGD to three-week lows.

D-day for NZ

The euro saw another session of weakness on Friday.

The EURSGD is down 1.0% over the last two days as ECB officials try to calm the market about the impending end of its money-printing program.

The EURSGD hit three-month lows.

In other markets, the Japanese yen was stronger while the British pound was weaker.

The New Zealand dollar was stronger ahead of an impending decision from the balance of power party NZ First following last month’s election.

NZ First leader Winston Peters will deliver government to incumbent National Party or a Labour/Green coalition.

An end to uncertainty could boost the NZD.

China focus

This week, China will dominate the headlines, with inflation on Monday, GDP on Thursday and the 19th Party Congress from Wednesday.

Tonight, the US’s Empire State manufacturing index is due to be released.

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