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Currency Market Analysis

Jan 15, 2019 | Currency Market Analysis

Global Themes

China’s trade slump boosts USD; Brexit vote tonight

The US dollar was higher yesterday after a fall in Chinese trade demand hit the local currency.

Importantly for Australia, imports into China fell 7.6% in the largest fall in two-and-half-years.

The news saw the US dollar and other safe havens climb.

Sing lower

The USDSGD ended 0.1% higher.

The Singapore dollar – closely tied to global trade expectations – was down across markets with the biggest losses versus the safe havens with Japanese yen up 0.5% and the Swiss franc up 0.4%.

Brexit vote

Tonight’s Brexit vote will likely dominate market focus with Theresa May’s deal still seen as unlikely to pass.

From there, the GBP might experience a sharp jump in volatility, with the potential outcomes ranging from a delay in the UK’s exit date, the so-called “no deal exit”, to another general election or even a second referendum.

The vote is expected late in the UK evening and is likely some time after 2.00am.

Otherwise, central banks will be the major theme with US producer prices due tonight while the European Central Bank President Mario Draghi also speaks tonight.


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