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Currency Market Analysis

Nov 29, 2017 | Currency Market Analysis

Global Themes

US dollar stronger as Powell signals continuity

The US dollar continued higher for the second consecutive day after US Federal Reserve chair designate Jerome Powell said he plans to continue the central bank policies of predecessors Janet Yellen and Ben Bernanke.

Powell, in front of the US Senate Banking Committee, stated he sees further growth for the US economy and expected the unemployment rate to fall below 4.0%. Powell said this is likely to drive further US rate hikes and see the Fed’s bond holding continue to be sold down.

Powell also said that he would use tools such as money printing if required and would look to “respond decisively” to any crisis.

Brexit deal nears

The USDSGD was only slightly higher as it climbed 0.1%.

The USDSGD was pressured in line with the USDJPY after reports North Korea had launched another test missile. This was North Korea’s first missile launch since September.

With the USD stronger, the SGD was higher in most other markets, most notably versus the euro and the Japanese yen.

The British pound was stronger on reports the UK government was nearing agreement with the EU on key Brexit payments.

US GDP

Tonight’s focus will be on the US with the all-important first reading of September quarter economic growth.

The market is looking for an annual GDP reading or 3.3%. This would be seen as a very strong result.

Also overnight, outgoing Fed chair Janet Yellen speaks, with commentary also due from Bank of England governor Mark Carney.


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