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Currency Market Analysis

Jun 21, 2021 | Currency Market Analysis

Global Themes

USDSGD at three-month highs as Bullard adds to hike fears

The greenback extended gains on Friday as key Federal Reserve officials added to expectations that a US rate hike might be sooner than current forecasts.

St Louis Fed president James Bullard, who usually favours lower interest rates, said he continued to see inflation as likely to be strong, expected to see prices pressures at target next year, and this would justify a rate hike.

This commentary follows Wednesday’s Federal Reserve meeting that indicated the majority of Fed members now expect rates to rise in 2023.

The US dollar extended gains on Friday with the USD index at two-month highs.

USDSGD jumps

The USDSGD gained 0.3%.

With the US dollar stronger, other major currencies tumbled.

The GBPSGD fell to one-month lows while the EURSGD fell to two-month lows.

A sharp sell-off in commodities saw the AUDSGD fall to the lowest level in 2021.

Fed talk ahead

Federal Reserve commentary will remain key this week with New York Fed president, John Williams, number three in the central bank hierarchy, speaking tonight.

Federal Reserve chairman Jerome Powell speaks on Tuesday and Wednesday night.

Global manufacturing activity numbers, via the purchasing managers index, are released on Wednesday with the Fed’s favoured inflation measure, the PCE, due on Friday.

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