Currency Market Analysis

Sep 16, 2019 | Currency Market Analysis

Global Themes

Markets on edge after Saudi strike, Fed due

Financial markets have started the new week on a nervous footing after a weekend strike on a Saudi oil facility unsettled investors.

The week’s Federal Reserve decision might also inject volatility into the week ahead.

Crude oil jumped 15% this morning as tensions grew after the attack on the Abqaiq facility – the world’s largest oil processing plant – was claimed by Houthi rebels in Yemen.

US Secretary of State Mike Pompeo blamed Iran in a tweet sparking fears of an escalation in tensions between the US and Iran.

Safe havens gain

The news saw the safe haven currencies like the US dollar and Japanese yen gain.

The USDSGD and JPYSGD both climbed from six-week lows.

Fed watch

The main economic event this week will be Thursday’s Federal Reserve decision with the market signalling an 87% chance of a cut (source: Reuters).

The Fed’s outlook and plan for future moves will likely be the major driver of the market’s reaction.

Otherwise, Chinese industrial production is due at 10.00am with the recent slowdown in Chinese activity a key concern across markets.

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