Currency Market Analysis

Mar 01, 2018 | Currency Market Analysis

Global Themes

US dollar strengthens as Fed testimony continues tonight

The US dollar continued to gain overnight as markets reacted to this week’s upbeat assessment of the US economy from the Federal Reserve.

New Fed chair Jerome Powell signalled that his personal assessment of the US economy had improved markedly since the Fed’s December meeting – commentary that suggests the US central bank might plan to raise rates at a quicker pace than currently expected.

US December-quarter growth figures, which were reported in line with expectations at 2.5%, also provided support to the USD.

Pound plunges

The USDGSD climbed 0.1%

In other markets, the British pound dominated headlines, after the EU’s chief Brexit negotiator said that a transition period for the UK’s exit was not guaranteed.

The GBP plunged on the news. The GBPSGD fell 0.9%

Powell testimony continues

In today’s session, the market will be looking to Australian capital expenditure, a key measure of business spending ahead of next week’s December-quarter growth numbers.

Tonight, Fed chair Powell continues his testimony to the US Congress, while an important reading of inflation, the PCE index, is due at 9.30pm.

For more information about upcoming events this month, please download our latest Global Currency Outlook and Events Calendar.

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