WorldFirst Currency Specialist, Daniel Chua, looks at the key trends of July and considers the many diverse events set to shape global currency markets throughout August.
USD – Bulls in Control
Month in review
The US dollar has pushed higher in the month of July and reached new heights, however, the greenback still fails to break 1.3750 against the Singapore dollar.
The bulls are in control after the US and the EU had a deal to prevent the trade war from escalating.
What’s next?
The focus for the dollar will now be the Federal rate decision, the market expectations for a hike is high and this might be a driver for the dollar.
GBP – Eyes on the Bank of England
Month in review
GBP/SGD had another volatile month trading trying to break the 1.81 mark twice but failed. The pound fell to a low of 1.78 due to Brexit uncertainties when key members David Davis and Boris Johnson resigned.
What’s next?
The Brexit fiasco has simmered down as the focus now will be on Bank of England rate decision on 2nd August with an expectation of 0.25% rate hike.
AUD – Going Sideways
The AUD/SGD is trading sideways between the ranges of 1.0030 to 1.0150 for the month of July. The USD’s direction is making a direct impact on the AUD with the rate hike in focus. Nevertheless, the ongoing trade war will always be an issue for the AUD’s direction.
What’s next?
Events like Federal Rate and BoE rate decisions (which will move the dollar) in the coming week will spark movement in the Australian dollar.
EUR – Draghi’s Comments Sparked Volatility
The EUR/SGD is also trading range bound for the month of July. Draghi’s comment at the end of the month on ‘no rate hike’ for the coming year triggered a plunge in the Euros. The EUR/SGD is still trading below 1.600 at the end of July.
What’s next?
The economic data for the following months will be closely monitored, as it will affect the monetary policy decisions in the European Union.
Disclaimer:
These comments are the views and opinions of the author and should not be construed as advice. You should act using your own information and judgement. Whilst information has been obtained from and is based on multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.