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Currency Market Analysis

Mar 21, 2019 | Currency Market Analysis

Global Themes

Greenback tumbles as Fed eases back from hikes

The US dollar tumbled overnight as the US Federal Reserve ended forecasts for US rate hikes this year and moved to end its controversial bond-selling program.

Most importantly, the Fed said it no longer expected to raise rates in 2019, reversing previous forecasts for two rate hikes. The Fed said it now only sees a 50% chance of a hike in 2020.

The move was seen as a wholesale change in the fed’s expectations and saw the greenback sharply lower.

The Fed also said it would end its balance sheet normalisation program in September. The program, which saw the Fed selling back to bonds it bought as part of its quantitative easing scheme. The program had been criticised for causing markets interest rates to rise.

Weaker

The USDSGD fell 0.3% as it dropped to the lowest level since early February.

Most other currencies gained as the USD fell. The euro and Swiss franc were both higher.

The British pound fell as the UK’s Brexit woes continued.

Aussie jobs

The Australian dollar could see further gains today with the local employment report due at 8.30am.

The market is looking for a relatively low 15k new jobs in February after a four-month wining streak saw the jobs report markedly beat expectations.

Later, the Bank of England and Swiss National Bank both meet. =


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