Currency Market Analysis

Dec 06, 2018 | Currency Market Analysis

Global Themes

USD gains further as Fed, jobs loom

The USDSGD bounced strongly from the lowest levels since July as markets look ahead to key US economic events.

The greenback has been recently weaker but tonight’s testimony from Federal Reserve chair Jerome Powell will be closely watched for reasons to push the US dollar higher.

Aussie tumbles

The AUD was sharply lower versus most currencies yesterday after a shock miss in September-quarter economic growth hit the local currency.

Third-quarter GDP was reported at 0.3% with the result well below the 0.6% predicted by economists. This was the biggest miss since the third quarter of 2016.

The main driver of the weakness was a poor showing by the local consumer with the fall in house prices potentially sapping local confidence.

This consumer slowdown occurred as local confidence weakened in August and September.

Jobs in focus

Tonight, markets will look to the US ADP jobs number ahead of tomorrow’s all-important US non-farm payrolls.

With recent focus on the potential for the US Federal Reserve to soon pause its rate hiking cycle, a strong jobs number could suddenly see the USD stage a strong recovery.

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