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Currency Market Analysis

Jun 22, 2020 | Currency Market Analysis

Global Themes

Greenback opens stronger as US virus cases spike

The USD was stronger on Friday and then saw an extension of the gains in early Monday trade as markets worried about a spike in COVID-19 cases – both in the US and globally.

In the US, a spike in cases to the highest levels since 1 May, with the three-day average climbing to above 30k, sparking fears of a second wave of cases.

Globally, cases climbed above nine million over the weekend, with the US, Brazil and India leading the increase.

Key levels

The USDSGD pushed higher as neared key technical levels at the three-week highs.

A move above these levels might trigger further USDSGD gains .

The GBP was weaker as the effect of the Bank of England’s expanded bond-buying program weakened the British pound.

The Aussie was weaker in most markets dragged down by falling equity markets.

PMI watch

The Chinese monthly Loan Prime rate is in focus in early trade with the one-year term expected to stay steady at 3.85%.

Tomorrow, global PMI numbers – a key timely measure of global economic activity – will be closely watched to measure any improvement in the global economic pulse.

Most recent data releases have beaten expectations but this might be due more to economists’ collective pessimism rather than actual good news.

On Wednesday, the Reserve Bank of New Zealand meet, with a close focus on the response to the recent strong gains in the NZD.

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