Currency Market Analysis

Jun 28, 2018 | Currency Market Analysis

Global Themes

USDSGD hits eight-month highs with Fed hikes in focus

The USDSGD jumped again overnight with the pair hitting the highest levels since 27 October 2017 as the greenback outperformed.

The US dollar continued to press higher with strong gains versus the safe haven currencies like the Japanese yen and Swiss franc in a sign that the recent moves have been driven not just by trade fears, but also by diverging interest rate expectations.

The USDSGD climbed 0.3%.

RBNZ cautious

In other markets, weaker safe have currencies saw the SGD gain.

The EURSGD fell .5% while the JPYSGD climbed 0.1%.

The NZDSGD fell after this morning’s Reserve Bank of New Zealand statement.

While the RBNZ sounded cautious, and signalled recent economic growth was below expectations, the central bank didn’t shift to a more aggressive stance towards rate cuts.

Market fears

Looking forward, the main focus will be on global markets, with any further selling in China to be seen as a negative for financial markets.

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

US GDP, due at 8.30pm, will also be in focus.

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