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Currency Market Analysis

Aug 16, 2021 | Currency Market Analysis

Global Themes

Greenback slips as US confidence plummets

The US dollar fell on Friday following negative news on consumer sentiment.

US consumer sentiment collapsed to ten-year lows as inflation jumped as a resurgence in Covid-19 hit confidence.

The USDCNH fell from early highs to finished flat.

RBNZ to drive action this week

The weaker US dollar saw other major currencies gain.

The euro and Japanese yen were both strongly higher.

The New Zealand dollar was stronger as markets looked ahead to this week’s major decision from the Reserve Bank of New Zealand.

The RBNZ is broadly expected to raise rates on Wednesday with the market pricing seeing a 100% chance of a hike from 0.25% to 0.50% (source: Refinitiv).

Central banks in focus

Apart from Wednesday’s RBNZ decision, central banks remain in focus across the global.

In the US, Federal Reserve chairman Jerome Powell speaks on Wednesday night while the most recent Fed minutes are due on Thursday.

The Reserve Bank of Australia minutes are due on Tuesday.

Otherwise, Chinese industrial production is released today and US retail sales are due Tuesday night.

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