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Currency Market Analysis

Feb 01, 2018 | Currency Market Analysis

Global Themes

USD continues move higher on Fed optimism

The US Federal Reserve’s overnight meeting saw no change in interest rates but the Fed statement upgraded expectations for inflation and said “further” hikes will be likely.

The US dollar gained.

The USDSGD was 0.1% higher in its third-consecutive winning session.

Hopeful Fed

The euro was stronger despite a weaker result from European inflation.

The eurozone inflation number, in annual terms, fell from 1.4% to 1.3%. The EURSGD was up 0.1%.

The Australian dollar was sharply lower over the last 24 hours after December-quarter inflation missed expectations while the US Federal Reserve sounded more optimistic about the US economy.

Australian inflation saw a small increase in annual terms to 1.9% (from 1.8% in the previous quarter) but came in below expectations of 2.0%.

The AUDSGD fell 0.4%.

US jobs loom

Tonight, US productivity and unit labour costs will be released. Overnight, the ADP jobs number beat forecasts in another sign of the US economy’s strength.

Tomorrow, the US non-farm payrolls release has the potential to drive further USDSGD gains.

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