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Currency Market Analysis

Aug 04, 2020 | Currency Market Analysis

Global Themes

USD extends gains as Nasdaq hits highs

The US dollar continued to climb overnight as its recent reversal higher extended.

The greenback had suffered big losses over the last two weeks, most notably versus the safe haven currencies, after the euro hit 18-month highs and gold jumped to new all-time highs.

However, this move reversed on Friday and continued overnight.

The US dollar was also boosted by gains in US technology stocks.

The tech-focused Nasdaq index made new all-time highs while Microsoft jumped on hopes it might be able to acquire social media app TikTok following US president Donald Trump’s decision to ban the Chinese-owned app.

Lower

The USDSGD was up 0.2% in its second day of gains.

The USD strength saw other major currencies mostly lower with the with EURSGD falling to one-week lows and the JPYSGD also falling to one-week lows.

Australian data

Today, Australian releases are in focus, with trade balance, retail sales and the Reserve Bank of Australia all due.

All of these releases might be supportive of the AUD.

The trade balance is expected to remain elevated as high commodity prices translate into a larger trade surplus.

Local retail sales are expected to see a massive 2.4% increase as government support packages and early superannuation withdrawals boost demand.

Finally, the RBA’s most recent commentary suggests further monetary action is unlikely in the near term. This view is also likely to support the AUD.


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