Currency Market Analysis

Jun 20, 2019 | Currency Market Analysis

Global Themes

US dollar hits two-month lows as Fed signals rate-cut plans

The US dollar fell after last night’s Federal Reserve meeting signalled the US central bank is becoming increasingly concerned about the global economy.

The Fed decided to keep interest rates on hold at last night’s meeting and said it would "act as appropriate" to sustain economic growth – a sign the central bank might cut rates later in the year.

In a clear shift in forecast, almost half of the17 Federal Reserve board members now expect to cut rates by the end of the year.

US shares climbed and bond yields fell.

Drop

The USDSGD fell 0.3% as it dropped to two-month lows.

In other markets, the US dollar weakness boosted other major currencies, with the British pound and Canadian dollar the largest beneficiaries.

Central banks

Today’s focus shifts to New Zealand with March-quarter New Zealand GDP numbers due.

The market is looking for 2.4% in annual terms.

Central banks will continue to drive the action with the Bank of Japan and Bank of England both meeting today.


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