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Currency Market Analysis

Oct 14, 2019 | Currency Market Analysis

Global Themes

USDSGD fall to three-month lows trade deal, MAS

The USDSGD fall to three-month lows on Friday after the US and China agreed to “phase one” of a trade deal.

The deal, which sees China agree to buy USD50 billon in agricultural products and the US agree to suspend tariffs that were due to start this month, was less comprehensive than forecasts.

As a result, the reaction markets, while positive, was somewhat muted.

The US and China will now work out further detail with the “phase one” deal expected to be signed in early November.

A further round of negotiations is also expected which means the ongoing trade newsflow is likely to continue.

The US dollar weakened on the trade news.

The Japanese yen was also weaker.

GBP jumps

The Singapore dollar also gained in early trade today after the Monetary Authority of Singapore announced a smaller-than-expected policy easing.

The MAS signalled it will continue to allow the SGD to appreciate but at a gentler rate.

The GBP jumped as the UK and EU worked towards a Brexit deal over the weekend.

However, some analysts doubt whether a deal is possible ahead of the 31 October deadline.

Chinese GDP

Chinese data will be in focus this week with the trade balance due today and the all-important September-quarter GDP due on Friday.

In Australia, the Reserve Bank of Australia minutes, due Tuesday, will be closely watched with the market seeing a 30% chance of a cut when it meets on 5 November.

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