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Currency Market Analysis

Oct 25, 2019 | Currency Market Analysis

Global Themes

USD climbs as manufacturing slowdown extends

The US dollar and other safe haven currencies were stronger overnight as a series of weaker global manufacturing numbers pressured the local currency.

The key purchasing manager index (PMI) releases reported an ongoing slowdown with weaker than expected numbers in Japan and Germany, both of which continue to signal contraction in this critical sector.

US data, however, unexpectedly improved, with the index maintaining its position in “expansion” with a reading of 51.5.

Boris busted

In Europe, the British pound and the euro were both lower as the UK’s Johnson government admitted it would not be able to achieve Brexit by 31 October and would instead look for an election in mid December.

However, the euro was supported after European Central Bank president Mario Draghi’s final meeting. The ECB kept policy on hold but remains deeply divided after re-starting its money-printing program at the last meeting.

Former International Monetary Fund chair Christine Lagarde takes over from Draghi.

Sentiment

In a quieter session ahead, consumer sentiment numbers from Europe and the US are the main releases.

Next week, Australian inflation and US September-quarter inflation will be the major announcements.


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