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Currency Market Analysis

Feb 14, 2018 | Currency Market Analysis

Global Themes

SGD pressured as markets look to US CPI

Nerves returned to financial markets overnight ahead of tonight’s critical US inflation reading.

The SGD weakened.

Last week’s heavy selldown across markets was driven by worries about rising inflation, because increased inflation is likely to lead to higher US interest rates.

With markets on edge, a higher than expected CPI result tonight could see renewed, market-wide selling.

Hit

The US dollar was sharply lower but the USDSGD saw only small losses, down less than 0.1%.

The SGD was sharply weaker in other markets with the local currency falling 0.4% versus the euro and losing 0.7% against the Japanese yen.

US CPI

The headline inflation reading, due at 9.30pm, is expected at 1.9%.

The US Federal Reserve inflation target is at 2.0%, so a higher number tonight will see markets look ahead to further potential Fed hikes.

Also tonight, US retail sales figures for January will be released.


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