Currency Market Analysis

Jun 27, 2018 | Currency Market Analysis

Global Themes

Greenback higher, yuan hit hardest as trade fears drive commodity selldown

The growing trade tensions continue to drive markets with Chinese markets bearing the brunt of the selling.

The US-China trade feud remains in focus with Chinese tariffs on US goods to introduced on 6 July.

The Shanghai Composite – China’s leading sharemarket index – fell into a technical bear market last month with a more than 20% fall from the recent highs. The market saw further selling this week.

Commodities prices have also weakened with copper down 10% in just over two weeks.

Climbing

The USDSGD was higher again overnight with the pair up 0.1%. ‘

The euro and Japanese yen both weakened as the US dollar gained.

The SGD neared three-month highs versus the Chinese yuan as the trade fears and financial stress hit the Chinese currency.

Durable goods

Tonight, US durable goods, a key measure of short-term economic activity, will be releases with the final reading for March-quarter US GDP due on Thursday night.

Also, tomorrow morning’s Reserve Bank of New Zealand meeting will be closely watched.

The NZD has been under pressure after new governor RBNZ Adrian Orr cut inflation forecasts and indicated the next move interest rates “is equally balanced, up or down”.


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