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Currency Market Analysis

Sep 21, 2020 | Currency Market Analysis

Global Themes

Tech tensions sees USDSGD rise from eight-month lows

The USDSGD was higher on Friday, as weaker sharemarkets and ongoing tensions between the US and China weighed on the Singapore dollar.

On Friday, US shares saw further selling with technology stocks pressured.

The focus remains on the break-up of the US operations of Chinese technology firm TikTok and the potential US banning of communications and ecommerce giant WeChat.

Gains capped

The USDSGD gained 0.3%.

The USD will also likely be driven by the impact of the US election with markets historically more volatile in the lead-up to presidential elections.

The EURSGD continued to climb from two-month lows with the euro recently rebounding from the lower end of a trading range.

The GBPSGD fell from two-week highs as COVID-19 cases jumped in the UK.

The JPYSGD gained 0.3% to seven-week highs in line with USDJPY weakness.

Central banks in focus

This week is likely to be dominated by central banks with the US Federal Reserve chairman Jerome Powell speaking tonight and tomorrow.

Tomorrow night, in particular, will be in focus with Powell to speak about the impact of the US government’s coronavirus support bill.

This morning, China’s benchmark rate, the loan prime rate, is due at 9.30am.

The Reserve Bank of New Zealand meeting, due on Wednesday, will also be crucial with market expectations growing for a move into negative interest rates.

Also on Wednesday, the market will be looking to global PMI numbers, which provide the most up-to-date reading on manufacturing and services sectors in leading economies, including Japan, Europe and the US.

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