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Currency Market Analysis

Sep 27, 2021 | Currency Market Analysis

Global Themes

USD stronger ahead of Fed commentary

The US dollar climbed as markets looked ahead to a busy week of speeches from US Federal Reserve officials.

The Federal Reserve last week suggested it was nearing a reduction in its bond-buying program. Chairman Jerome Powell said the move to taper “could come as soon as the next meeting.”

Key Fed board members confirmed this view on Friday with Loretta Mester and Esther George both saying the conditions to begin to taper bond purchases have now been met.

This week, a number of Fed officials speak, but the clear highlight will be from Jerome Powell on Tuesday night as he speaks to the US Congress and Wednesday night when he speaks on a European Central Bank panel.

SGD weaker

The USDSGD gained as the SGD fell on weaker share markets.

Global markets were also pressured around Chinese property group Evergrande after the firm’s electric car division said it required new funding to stay afloat.

The euro fell. The EUR market remains focused on the weekend’s deadlocked German election with the left-leaning Social Democrats holding a small advantage.

The British pound was stronger after Thursday’s Bank of England decision seemed to indicate the UK central bank was considering lifting official interest rates.

Central banks in focus

Looking forward, the main focus this week comes from central banks with officials from the US Fed, European Central Bank and Bank of England all due in the next 24 hours.

In terms of data, US durables goods orders, released at 8.30pm, will provide an up-to-date read on the US economy. US data has recently improved.

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