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Currency Market Analysis

Aug 01, 2019 | Currency Market Analysis

Global Themes

USDSGD jumps to two-month highs as Fed disappoints markets

The USDSGD jumped to two-month highs after last night’s Federal Reserve rate cut disappointed markets

The US Fed cut interest rates by 25 basis points but markets were upset by the Fed’s view that this was a “mid cycle adjustment” rather than the first in a series of interest rate cuts.

The US’s Dow Jones index dropped 1.2%, falling from levels near all-time highs, and the negative sentiment boosted safe havens like the greenback.

Greenback the driver

The stronger US dollar drove big moves in other markets.

The EURSGD fell to four-month lows as markets looked to a potential ECB cut in September.

The JPYSGD dropped back to two-week lows as the stronger greenback pressured the Japanese yen.

Action

There’s plenty more action to complete the week with Chinese manufacturing numbers, due at 9.45am, the main focus this morning.

Tonight, the Bank of England meet, but the GBP remains more likely to be driven by Brexit worries.

Tomorrow, Australian retail sales are due, while US non-farm payrolls are released tomorrow night.


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