Currency Market Analysis

Feb 24, 2020 | Currency Market Analysis

Global Themes

Dow, greenback reverse as slowdown hits US; SGD opens weaker

The non-stop run in US shares and the greenback turned abruptly on Friday after a shock drop in US economic activity unsettled market confidence.

US manufacturing PMI produced a shock result of 50.8 (versus the 51.5 expected) while the services index fell into contraction at 49.4 (versus the 53.3 expected).

The US purchasing managers index, a key measure of activity and sentiment, has held up well over the last year as the rest of the world struggled.

Friday’s miss sparked fears that the US might have succumbed to the world’s economic slump.

New virus fears

The turn in the greenback helped the USDSGD slip from three-year highs.

However, a jump in coronavirus cases over the weekend, especially in South Korea and Italy, pressured the SGD in early Monday trade.

Confidence counts

Tonight, German business conditions and sentiment will be closely watched.

On Wednesday, US consumer confidence will be key after Friday’s poor PMI numbers.

Thursday’s Australian capital expenditure numbers will be the first component ahead of next week’s December-quarter GDP.

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