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Currency Market Analysis

Mar 05, 2021 | Currency Market Analysis

Global Themes

USD nears three-month highs as Powell offers cold comfort

US bond yields jumped – and US shares fell – as US Federal Reserve chairman Jerome Powell offered little to comfort markets after a week of volatility.

In a highly anticipated speech, Powell held the line saying rates would stay low until “substantial policy progress [on inflation and employment] has been made.”

Importantly, Powell didn't announce any action on recently rising bond yields instead only saying the move “was something that was notable and caught my attention.”

US shares came close to erasing the gains seen so far this year with the benchmark S&P500 down 1.3% overnight.

Three-month highs

The USDSGD gained 0.4% as it neared three-month highs.

The move was mostly driven by a rising US dollar with the SGD better in other markets.

The EURSGD fell 0.4% while the JPYSGD fell 0.5%.

US jobs in focus

The US dollar remains in focus with the all-important US non-farm employment report due at 9.30pm.

Wednesday night's ADP jobs, often seen as a precursor to the jobs report, disappointed, with only 117k new jobs versus the 201k expected.

Tonight’s report is expected to produce 197k new jobs with the unemployment rate forecast at 6.3%.

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