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Currency Market Analysis

Oct 09, 2019 | Currency Market Analysis

Global Themes

USD climbs as tensions grow ahead of US-China talks

The US dollar climbed, and most key equity markets fell, overnight as tensions between the US and China grew ahead of this week’s key trade talks.

News the US government would restrict visas for some Chinese officials pressured markets already on edge, with a controversy surrounding NBA telecasts into China and more pessimistic commentary from Chinese trade officials hitting markets.

Global sharemarkets fell with the benchmark Dow Jones down 1.2%.

Pound tumbles

The USDSGD climbed 0.2%.

The British pound fell on reports of a tense phone call between the UK’s Boris Johnson and Germany’s Angela Merkel. The market has grown increasingly concerned that new deal will not be agreed ahead of the key Brexit date of 31 October.

The euro was flat while the Japanese yen was stronger.

Fed cuts seen

The US Federal Reserve remains in focus tonight after a key speech from the Fed chair Jerome Powell overnight signalled the likelihood of another rate cut at the end of the month.

Bond markets see an 82% chance of a Fed cut on 31 October.

Powell speaks again tonight with the Fed minutes due at 2.00am.

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