Currency Market Analysis

Apr 08, 2020 | Currency Market Analysis

Global Themes

USDSGD falls to one-month lows, but Dow reversal signals risk

The Singapore dollar had its second consecutive winning session overnight as a big rally across sharemarkets yesterday boosted sentiment.

Asian sharemarkets were strongly higher with the Japan’s Nikkei up 2.0% and Hong Kong’s Hang Seng up 2.1%.

However, a sharp reversal in US sharemarkets sparked concern near the end of last night’s trading.

After opening higher, the benchmark Dow Jones fell

nearly 1000 points to end down for the day. A rise in the number of coronavirus deaths in New York pressured markets.

RBA on hold

The AUD was helped by yesterday Reserve Bank of Australia meeting with the local central bank signalling it is comfortable with current policy settings.

The euro was stronger, up 0.4% versus the SGD, while the Japanese yen weakened, down 0.2%.

Central bank action

The near-term focus for FX markets will be on global equity markets.

A further sell-off could weigh on the SGD.

In terms of raw economy, the US Federal Reserve minutes are due tonight, while the Bank of Japan meets tomorrow.

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