Currency Market Analysis

Jul 10, 2019 | Currency Market Analysis

Global Themes

USDSGD hits three-week highs as Fed nerves bite

The USDSGD reached three-week highs overnight as markets remained on edge ahead of tonight’s critical testimony from the US Federal Reserve.

Fed chairman Jerome Powell testifies to the US Congress tonight – with a follow-up session tomorrow night – with markets keen to hear the Fed chair’s view ahead of next month’s monetary policy meeting.

US bond markets see a 100% chance of a cut at this meeting, due on 1 August, but the major question remains whether the Fed expects to cut further in 2019.

Hopes for a Fed cut had earlier boosted sentiment – including the AUD – but last week’s stronger US jobs report has now unsettled markets.

Pressured

The euro and British pound both remain pressured as markets worry about a potential “hard Brexit” from the UK.

The AUDSGD fell 0.6% with the pair pressured after breaking key support at the two-week lows.

CAD at highs

In addition to the Fed chair’s testimony, the Fed minutes from their 20 June meeting are also due at 2.00am tonight AEST.

Also tonight, the Bank of Canada meets, with the CAD recently much stronger.


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