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Currency Market Analysis

Jul 14, 2021 | Currency Market Analysis

Global Themes

USDSGD at eight-month highs after US inflation jump

The USDSGD traded to the highest level since November overnight after US inflation jumped sharply higher.

US headline inflation was up 5.4% in June in annual terms well above the 4.9% expected.

Energy and used car prices were the main drivers.

The result was the highest since 2008.

USD jumps

The US dollar jumped on the news with the USD index returning to three-month highs.

The USDSGD gained 0.3%.

The euro fell while the Japanese yen was steady.

Central banks in focus

Central banks are in focus today with the Reserve Bank of New Zealand due at 10.00am.

The RBNZ has signalled it is closer to considering higher interest rates as the NZ economy recovers and the housing market remains overheated.

At 10.00pmthe Bank of Canada meets, with this central bank also considering reducing stimulus after winding back support at its May meeting.

Most importantly, Federal Reserve chairman Jerome Powell speaks at 12.00am as markets look to his view on last night’s massive inflation jump.

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