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Currency Market Analysis

Oct 29, 2019 | Currency Market Analysis

Global Themes

USD, JPY fall as US shares hit all-time highs

The US dollar was mostly weaker as global sharemarkets extended recent gains with key US share indexes reaching new all-time highs.

The S&P 500 and technology-focused Nasdaq both climbed to all-time highs with the Dow Jones index just below record levels.

US shares were boosted by more positive commentary around trade.

Yesterday, Chinese officials said the text for the deal was “basically completed” while US President Donald Trump said talks were “ahead of schedule”.

Fed cut hopes

Key markets, were also helped by expectations for a Federal Reserve rate cut when the US central bank meets on Thursday morning.

The USDSGD fell 0.1%.

The Japanese yen was also weaker..

The GBP gained after the EU extended the Brexit leave date to 31 January.

The GBP later fell as UK prime minister Boris Johnson’s hopes for an early election were

initially frustrated.

RBA speech

The focus today turns to the Reserve Bank of Australia with a key speech from governor Philip Lowe.

In Australia, markets expectations for a rate cut have fallen sharply, with only a 15% chance of a cut next week according to the local bond market (source: Reuters).

Otherwise, all eyes look ahead to Thursday morning’s Federal Reserve meeting.

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