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Currency Market Analysis

Jul 06, 2021 | Currency Market Analysis

Global Themes

USD drifts further as markets await RBA

The USDSGD fell further overnight as a closed US and caution ahead of the Reserve Bank of Australia combined to keep markets tepid.

The US was closed for the Fourth of July long weekend and other markets mostly continued to react to the weaker unemployment and wages numbers announced on Friday. The USD drifted lower.

Equity markets were encouraged by hopes the weaker employment data would cause the US Federal Reserve to second-guess moves to wind back stimulus.

The German DAX gained 0.1% while the UK’s FTSE was up 0.6%.

USDSGD lower

The USDSGD fell 0.1%.

With the USD lower, most major currencies gained, with the British pound and Japanese yen higher.

The euro was weaker, however, with the EURSGD near three-month lows.

RBA watch

Locally, today’s RBA meeting will be key the Australian dollar.

The Reserve Bank of Australia is expected to make a determination on the next round of quantitative easing and yield curve control at its July meeting.

The market broadly believes yield curve control might be suspended while the money-printing QE program might continue.

The RBA decision is due at 12.30pm with a follow-up speech at 2.00pm.

Later, German data will be closely watched, with German factory orders and business and consumer confidence numbers due.

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