Currency Market Analysis

Jun 20, 2018 | Currency Market Analysis

Global Themes

USD climbs as trade fears hit sharemarkets

The US dollar continued to climb as ongoing trade tensions weighed on global markets.

Key sharemarkets saw significant losses yesterday with the US’s Dow Jones down 1.2%, the Japanese Nikkei falling 1.8% and the Chinese Shanghai Composite dropping a massive 3.8%.

The safe haven currencies, like the USD, JPY and CHF, all gained.

RBA shift?

The Aussie was also pressured after a small change in the Reserve Bank of Australia minutes hit the local currency.

The RBA removed the reference to the central bank’s next move – previously said to be “up” – in a change that caused markets to believe the RBA had become more cautious on the Australian economy.

Euro weaker

The European Central Bank forum in Sintra, Portugal will be the highlight today with the Fed’s Jerome Powell, ECB’s Mario Draghi and BoJ’s Haruhiko Kuroda all due to speak tonight.

So far, the forum has presented a cautious view of the world, with key speakers suggesting the global move to tighten policy would be only gradual.

Last night, Draghi said the ECB would remain “patient in determining the timing of the first rate rise”. The euro eased on the news.

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