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Currency Market Analysis

Mar 24, 2020 | Currency Market Analysis

Global Themes

USDSGD at 11-year highs as Fed pushes QE to “next level”

The USDSGD hit the highest level since early 2009 as the US Federal Reserve moved to the next level of its quantitative easing program by buying corporate bonds and other loan-backed securities.

The move is the next step in a program that has seen the Fed buying government bonds for the last decade. The move mirrors a strategy already implemented in Japan.

US stocks initially rallied on the news but still ended down.

The Dow fell 3.0%.

MAS brought forward

The USDSGD was higher after an announcement that monetary Authority of Singapore would bring forward their next policy meeting.

The MAS will now meet next Monday, 30 March.

The euro and Japanese yen were both stronger.

The EURSGD gained 1.1% while the JPYSGD gained 0.3%.

Looking forward, while economic data has mainly taken a back seat over the last few weeks, today’s latest PMI numbers are likely to give some insight into the immediate impact of the coronavirus outbreak.

PMI – the purchasing managers index – provides one of the most up-to-date readings of economic activity.

In early trade, Japanese PMI series saw manufacturing fall to 45 from 48 last month. Any reading below 50 signals a contraction in activity.

Later in the day, we get readings from Europe, the UK and US.

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