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Currency Market Analysis

Oct 04, 2019 | Currency Market Analysis

Global Themes

USDSGD falls to one-week lows after US data turns

The US dollar was weaker overnight as another poor US economic reading initially pressured markets before a later recovery was driven by stimulus hopes.

The US services PMI number – an important measure of economic activity – plunged in September and considered s sharp drop in the manufacturing PMI on Tuesday.

US shares initially fell by as much as 1.3% before a later recovery was boosted by hopes for another rate cut from the US Federal Reserve.

The market pricing for a Fed rate cut rose to 85% when the Fed next meets on 31 October (source: Reuters).

Yen strength

The growing nervousness in markets has seen the Japanese yen outperform.

The JPYSGD climbed to the highest level in one month.

The British pound remained broadly steady as EU opinion looked likely to reject the UK’s new Brexit deal.

Retail, jobs

In early trading today, the focus is on Australian retail sales, with the market looking for a much-stronger-than-usual 0.5% for August.

Later, US non-farm employment is due with the market looking for 145k new jobs.

However, the recent slowdown in US data might see a disappointment tonight.

US jobs are due at 8.30pm.

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