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Currency Market Analysis

Mar 15, 2021 | Currency Market Analysis

Global Themes

USD starts the week higher as bond yields rise again

The US dollar started the new trading week higher after US bond yields reached new highs on Friday.

The sharp climb in US bond yields has been the defining theme in markets over the last month as investors worry that the move might be a sign of rising inflation and potential rate hikes from major central banks.

On Friday, the US ten-year bond yields jumped from 1.52% to 1.64% - the highest level since the start of the pandemic.

US boosted

The rise in bond yields helped the US dollar and caused the USDSGD to climb 0.4% on Friday.

The stronger US dollar pushed the Japanese yen back to recent lows.

The New Zealand dollar was pressured by a poor business confidence reading. The AUD also lost ground.

However, the euro gained as the markets extended gains after last week’s European Central Bank meeting.

China data

A big week in FX markets starts with China releases key monthly data including retail sales and industrial production at 10.00am.

The US sees its monthly retail sales numbers on Tuesday night while the all-important US Federal Reserve decision is due on Thursday morning.

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