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Currency Market Analysis

Jul 09, 2019 | Currency Market Analysis

Global Themes

Greenback gains further as US jobs result hits risk appetite

The US dollar continued to climb overnight as markets reacted to Friday’s very strong US jobs report.

The positive number from the US employment made was seen as making a Federal Reserve rate cut less likely. The new trading week started with global share markets uniformly lower yesterday.

The Singapore STI fell 1.0%, the Japanese Nikkei lost 1.0% while the US’s Dow Jones dropped 0.4%.

The Singapore dollar – usually tied to risk sentiment – also lost ground.

Chinese reserves

The Chinese yuan saw gains yesterday after as increase in FX reserves signalled the Chinese government had eased any potential moves to devalue its currency.

The Canadian dollar was weaker, falling from recent highs, ahead of this week’s Bank of Canada meeting.

The Australian and New Zealand dollars were both weaker.

Confidence counts

The major release today comes from Australian business confidence with a number of recent catalysts – including the re-election of the Morrison government and recent RBA cuts – potentially boosting sentiment.

Later this week, the focus shifts to the US Federal Reserve, with Fed chairman Jerome Powell speaking to the US Congress tomorrow night.

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