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Currency Market Analysis

Jul 09, 2021 | Currency Market Analysis

Global Themes

Shares hit, USD higher, as Fed fright takes hold

Financial markets extended recent losses overnight with the US’s Dow Jones index down 0.8% as markets continued to react to expectation of a reduction in stimulus form the US Federal Reserve.

Yesterday’s Fed minutes saw the central bank say it would begin discussions on tapering its bond buying program within the next few meetings.

SGD hit

The USDSGD gained 0.3%.

Other major FX markets outperformed as investors favoured safe havens.

The EURSGD gained 0.8% while the JPYSGD gained 1.1%.

The AUD was one of the hardest hit currencies with the relative interest rate advantage in the AUD pressured as bond yields around the world tumbled.

Chinese CPI

Chinese inflation is due at 9.30am with markets clearly skittish on inflation pressures and how central banks might react.

In China, however, the focus is more on the potential for central banks to loosen to try and drive slowing growth.

Later, UK data, including GDP and industrial production, will be released.

European Central Bank president Christine Lagarde also speaks.

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