Currency Market Analysis

Oct 08, 2018 | Currency Market Analysis

Global Themes

USDSGD highest since July 2017 despite US jobs miss

The USDSGD was the highest since July 2017 despite a weaker than expected result from the US labour market.

The all-important US non-farm payrolls was reported on Friday with 134k new jobs created, well below the 185k expected.

However, with the previous month’s result revised to a massive 270k result, and the unemployment rate falling to a near 50-year low at 3.7%, the US dollar continued its strong run higher.

Brexit boosts GBP

The British pound was strongly higher, climbing to the best levels in six months, as the EU signalled it was ready to compromise on the troubled Brexit negotiations.

The AUD fell to new two-and-a-half year lows. The AUD has seen further pressure ever since the US Federal Reserve’s 27 September meeting that signalled the central bank remains focused on further US rate hikes.

The New Zealand dollar was also weaker with the kiwi the worst-performing major currency last week.

FX fix in focus

We have a quieter week of economic data releases but there remains major risks for FX markets.

Regionally, this morning’s Chinese yuan fix has the potential to drive the US dollar higher. China returns from its five-day Golden Week holiday and the first official fix since 28 September could see the CNY fall.

With the US dollar’s strength the clear driving force in markets, Thursday’s monthly inflation reading will be seen as critical.

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