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Currency Market Analysis

Jan 08, 2019 | Currency Market Analysis

Global Themes

Safe havens like USD, JPY fall as shares continue higher

The US dollar again overnight as US equity markets continued their rebound.

The US’s Dow Jones index was up 0.4% overnight after gaining 3.5% on Friday.

US shares boosted by the US Federal Reserve’s soothing words on Friday and hopes that this week’s US-China trade talks might bring a breakthrough.

Improved sentiment

The improved global sentiment saw safe haven currencies like the US dollar and Japanese yen both fell.

The USDSGD fell to six-month lows while the Japanese yen was also weaker as it fell from the two-year highs seen in last week’s “flash crash”.

Manufacturing worries

While sharemarkets have gained in the last two days, risks remain.

Yesterday, we saw the Australian manufacturing sector fall into contraction while the US non-manufacturing PMI missed significantly overnight.

These leading indicators continue to signal risk for FX markets over the next few months that could see the USD and JPY regain their strength.

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