WorldFirst Currency Specialist, Lydia Paik, takes a look at the key trends of November and considers the many diverse events set to shape global currency markets in December.

USD: The US Dollar bear dominated in November

Month in review

The Greenback remained bearish most days in November, on the backdrop of a weaker labour market and negative sentiment surrounding the US’s stalling political agenda. USDSGD briefly hit a 2-month low of 1.3436 and traded at 1.3460 just before month close.

What’s next?

Looking forward, missile threats from North Korea and Trump’s political retorts are likely to be the key drivers of the USD. With Jerome Powell looking to succeed Yellen, the market is also widely expecting a rate hike in mid-December.

EUR: Euro lifted by positive outlook in the zone

Month in review

The Euro strengthened in November, recovering its losses from October. This is largely due to optimistic data (positive PMI & strong IFO business climate index) from the Eurozone. EURSGD reached a high of 1.608, before trading around 1.594 towards the end of the month.

What’s next?

Eurozone loan growth suggests a more upbeat picture for the Euro dollar, but the ECB has committed to a low-interest rate environment, expecting core inflation to be maintained below the target of 2%.

GBP: Sterling surges on new Brexit optimism

Month in review

The Pound rallied in light of positive progress made on the Brexit bill between UK and the EU. GBPSGD largely recovered its losses from the start of the month, trading from a low of 1.7740 to a high of 1.8000 at month’s end.

What’s next?

Brexit negotiations with the EU have proven to weigh heavily on GBP and are likely to drive its direction in the coming months.

AUD: Aussie Dollar continues to stumble

Month in review

AUD suffered another fall this month, making November the fourth consecutive bearish month. AUDSGD is currently trading at 1.022, a 5-month low. This was largely driven by the RBA’s hawkish stance and decision to keep interest rates unchanged.

What’s next?

The markets will be keenly awaiting the RBA’s response to the tricky rising housing market and slowing wage growth combination.

 

 

 

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. Please consider FX derivatives are high risk, provide volatile returns and do not guarantee profits.

 

Shares 0