Become a client

Currency Market Analysis

Jun 14, 2018 | Currency Market Analysis

Global Themes

USD weakens as Fed lifts rates, signals more to come

The USDSGD fell overnight after the US Federal Reserve raised US interest rates to an 11-year high of 1.75% to 2.00%.

The US dollar was lower despite a more upbeat assessment of the US economy with the Fed’s projections looking for two more hikes in 2018.

Previously, the Fed expected to only raise rates one more time.

USDGSD fall from highs

The USDSGD climbed to two-week highs immediately after the announcement before later easing back lower.

Typically, a move to raise interest rates boosts the US dollar, but the effect is not always immediate.

The euro was stronger ahead of tonight’s key meeting from the European Central bank.

The Japanese yen and British pound were both weaker.

ECB in focus

FX markets could face further volatility with Australian jobs numbers due at 9.30am and the key European Central Bank meeting at 7.45pm.

Australian jobs are expected to see a 19k increase, but local employment numbers have recently missed expectations. A weaker number could pressure the AUD.

Tonight, the critical European Central Bank meeting could see further gains for the EUR, with markets expecting further detail on the likely end-date for the ECB’s long-running stimulus program.

Get the daily currency market analysis in your Inbox

Published five days a week, this newsletter provides day-to-day trends and activities affecting the market in easy-to-understand snapshots.