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Currency Market Analysis

Feb 19, 2018 | Currency Market Analysis

Global Themes

USD bounces from lows as strong data lifts

The US dollar bounced from three-year lows on Friday after a clean sweep of positive US data boosted the greenback.

Building permits, housing starts and consumer confidence all beat expectations on Friday.

So far this year, however, the US dollar has been unmoved by better news, with markets instead focused on the potential for tighter monetary policy in Japan and Europe, while President Trump’s tax cuts have stoked fears of budget deficits.

On Friday, the US dollar found buyers at major three-year support. This week, the US dollar’s fate will be driven by its ability to stay above last week’s lows.

Euro slips

The US dollar’s move pressured the euro with the EURSGD falling to near one-month lows.

The Japanese yen continued its recent run higher.

The Australian dollar continued to lose ground after the Reserve Bank of Australia governor Philip Lowe again said low wage growth was one of the greatest concerns for the Australian economy.

Wages in focus

Global markets might start quieter this week with the US closed for Presidents’ Day, while some Asian markets continue to celebrate Chinese New Year.

From overseas, the manufacturing PMI gauges, due Thursday, will be the week’s major release.

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