Currency Market Analysis

Jul 13, 2021 | Currency Market Analysis

Global Themes

FX on hold ahead of US inflation

The US dollar crept higher overnight but markets were mostly steady ahead of tonight’s all-important US inflation numbers.

US consumer inflation looks likely to reach a 13-year high of 4.9% in June with an explosion of post-lockdown demand in the US driving up prices.

The core number, which excludes food and energy, is forecast at 4.0% in annual terms.

However, markets are now less concerned around price pressures, as seen by the recent fall in US ten-year bond yields.

Instead, markets are now more concerned with possible rate hikes from the US Federal Reserve.

CPI caution

The USDSGD gained 0.1%.

The euro and Japanese yen both fell.

China trade due

Apart from US inflation, FX markets will see a busy few days with key data released.

Australian business confidence reading will be seen as crucial as the impact of the Sydney lockdown wears on sentiment.

Chinese trade balance is released around 10.00am.

Tomorrow, the Reserve Bank of New Zealand meet with market forecast suggesting the central bank could be considering rates hike to try and control the country’s rapidly-rising housing market.

Get the daily currency market analysis in your Inbox

Published five days a week, this newsletter provides day-to-day trends and activities affecting the market in easy-to-understand snapshots.