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Currency Market Analysis

Aug 20, 2019 | Currency Market Analysis

Global Themes

USD still higher as governments talks stimulus

Global sharemarkets were higher overnight as major governments looked to stimulus programs.

While higher sharemarkets can usually pressure the USD, a large rise in US bond yields helped the greenback overnight.

European markets were boosted by hopes of a large German stimulus program while hopes for a temporary cut in US payroll tax helps US shares.

In Germany, the benchmark Dax index climbed 1.3% while the US’s Dow Jones index was up 1.0%

Can’t get started

While the US dollar gains, the other safe haven currencies fell, with the Japanese yen and Swiss franc both lower.

The Australian dollar didn’t benefit as the global uplift in confidence boosted US bond yields making the AUD less attractive on a relative basis.

RBA minutes

Today’s focus comes from the Reserve Bank of Australia with the bank’s minutes from their 6 August meeting due at 9.30am.

The RBA looks to be on hold for the moment but markets believes the central bank will cut rates twice by next February.

Tomorrow night, the central bank focus continues, with the Federal Reserve’s minutes from their most recent meeting likely to be scrutinised.

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