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Currency Market Analysis

Jun 22, 2021 | Currency Market Analysis

Global Themes

USDSGD falls as Fed commentary steps back from hikes

Global sharemarkets rebounded strongly overnight after key Federal Reserve officials stepped back from talk of rate hikes.

Others, however, continued to talk about a potential easing of stimulus.

New York Federal Reserve President, John Williams, said overnight that the US economy has not grown enough to pare stimulus and he expected inflation to fall once re-opening bottlenecks are resolved.

On the other hand, James Bullard and Robert Kaplan, other key Fed members, said it was already time to consider winding back support.

USD slips

Financial markets focused on Williams’ comments with the Dow Jones up 1.8% and the Nasdaq up 0.6%.

The USDSGD fell 0.3%.

The improved sentiment saw the euro, Australian dollar and British pound perform strongly.

More Fed to come

The focus remains on the Federal Reserve with FOMC chairman Jerome Powell speaking to Congress overnight.

Fed board member Mary Daly also speaks tonight.

Otherwise, EU consumer confidence and US housing data is released.

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