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Currency Market Analysis

Jul 19, 2021 | Currency Market Analysis

Global Themes

USDCNH nears three-month highs as US shares turn lower

Financial markets ended the week lower with falling bond yields and worries about the impact of the Delta variant of Covid-19 hitting sentiment.

The Dow Jones fell 0.9% while the technology-focused Nasdaq lost 0.8%.

US ten-year bond yields fell to 1.30% close to the lowest level since February.

USD, JPY higher

FX markets favoured safe havens with the US dollar and Japanese yen the best performers.

The USDCNH gained 0.2% as it neared the three-month highs at 6.5000.

The HKDJPY gained but remained near one-month lows.

The euro was stronger while the British pound weakened.

The AUD was pressured by the weakness across markets with the AUDHKD falling 0.3% as it hit the lowest level since 7 December.

The NZ dollar was as markets continued to react to last week’s Reserve Bank of New Zealand decision to end its money-printing program and look ahead to potential rate hikes.

Central banks in focus

The week ahead remains focused on central banks with the Reserve Bank of Australia minutes due tomorrow and the European Central Bank meeting on Thursday.

Otherwise, the pace of the global economic recovery with be scrutinised with PMI numbers due on Friday.


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