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Currency Market Analysis

Jan 30, 2018 | Currency Market Analysis

Global Themes

USD jumps on wage data, but SGD climbs versus others

The US dollar’s selldown staged a small reversal overnight after last week’s heavy selldown saw the worst week for the greenback since June.

The greenback was boosted by a strong reading for income growth (up 0.4% in December versus 0.3% expected). We’ll see further details on US wages in Friday night’s US non-farm payrolls report.

Slow wages growth has been a major concern for the US Federal Reserve and the better result overnight boosted expectations that the Fed will raise rates when they meet in March. Market pricing suggests a 90% chance of a hike in March.

The Fed will meet Thursday morning but markets expect the US central bank will postpone any hike until its March meeting which will be Jerome Powell’s first meeting as new Fed chair.

SGD higher

The USD climbed versus the SGD, up 0.2%, but the local currency was higher versus all other major currencies.

The SGD was stronger in Europe, with the EURSGD down 0.1% while the GBPSGD fell 0.2%.

The SGD was also stronger versus the Japanese yen as the JPYSGD slipped from two-month lows.

Euro GDP

From overseas, Eurozone fourth-quarter growth numbers, due at 6.00pm, will be key for the euro with the currency near one-week lows.

Tomorrow, Chinese PMI activity numbers will be the major release.

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