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Currency Market Analysis

Oct 12, 2020 | Currency Market Analysis

Global Themes

USDSGD hits nine-month lows on Biden “clean sweep” hopes

The US dollar fell on Friday as hopes for a Democratic “clean sweep” in next month’s presidential elections boosted hopes for a broader stimulus program.

The US’s Dow Jones gained 0.6% while the technology-focused Nasdaq gained 1.5%.

The USDSGD fell 0.6% to end at the lowest point since January.

US stimulus talks will remain in focus in the near term, but with the presidential election only three weeks away, markets might remain on tenterhooks, with any disappointment might pressure equity markets.

CNH move

In early trade, however, the USDSGD jumped higher on the back of moves in the USDCNY.

The USDCNY jumped after the People’s Bank of China cut the reserve requirement for USDCNY buyers. This was seen as a signal that the recent falls in the USDCNY has created some concern for the PBOC.

In other markets, the weaker US dollar boosted other currencies.

The EURSGD jumped from three-month lows while the JPYSGD fell back to four-month lows before lifting.

US closed

FX markets might be quieter with the US closed for their Columbus Day holiday.

Tomorrow, Chinese trade balance figures are due.

In Australia, a major speech from Reserve Bank of Australia governor Philip Lowe will be closely watched ahead of Australian monthly employment figures. The RBA said this month that the labour markets will be key for the central bank’s next move.

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