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Currency Market Analysis

Mar 02, 2021 | Currency Market Analysis

Global Themes

USD reverses lower as bond markets calm; RBA due

Global markets calmed overnight after the heavy selling seen at the end of last week with US equities higher and, importantly, bond yields lower.

A spike in US bond yields last week spooked markets as the threat of inflation loomed and investors fretted that the US Federal Reserve might need to raise interest rates.

While these concerns remain, a pullback in US bond yields helped sentiment overnight.

The US’s S&P 500 gained 2.4% -- its best gains in nine months.

SGD boosted

The Sinagpore dollar was helped by the improved sentiment.

The USDSGD fell 0.3%.

The SGD gained on other markets.

The EURSGD fell 0.5% while the JPYSGD also lost 0.5%.

RBA due

The focus today will be on the Reserve Bank of Australia meeting due at 9.30am.

The RBA was forced to unexpectedly intervene into the Australian bond market yesterday to lower the benchmark three-year bond yields which had risen above the central bank’s 0.10% target.

Later today, EU inflation numbers will be closely watched after last week’s bond market nerves.

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