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Currency Market Analysis

Feb 22, 2021 | Currency Market Analysis

Global Themes

USD slips as stimulus hopes grow

The US dollar fell further on Friday as expectations grew for even more stimulus from the US Federal government.

US media reports centred on a further USD3 trillion potential package on top of the USD1.9 trillion package currently being considered.

US bond yields jumped on the news, with the benchmark 10-year yields climbing to 1.34%, while the US dollar fell.

USD down

The USDSGD was lower.

With the greenback falling, the Euro and Japanese yen both gained.

The AUD exploded higher, with the pair up 1.4%, as it broke though the major resistance at the three-year highs.

Fed in focus

The main focus this week is on US Federal Reserve chairman Jerome Powell’s testimony to the US Congress.

Powell is expected to continue to signal the US central bank will keep rates low to stoke US growth – a program that could keep the USD subdued.

Later in the week, the Reserve Bank of New Zealand meet on Wednesday, in a meeting also likely to be closely watched.

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