Global Themes

USD dollar returns to five-month highs as Fed signals June hike

The USDSGD rebounded from yesterday’s selldown overnight as the US Federal Reserve confirmed its comfort with a period of heightened inflation.

This year, markets have been worried that new Fed chair Jerome Powell would be forced to raise rates at a quicker-than-expected pace if US inflation accelerated.

However, the Fed minutes, released overnight, confirm the views we heard earlier this week from the Atlanta Fed’s Raphael Bostic that higher inflation would “offset misses” and Philly Fed’s Pat Harker that he was in “no rush” to raise rates.

Euro nears one-year lows

The USDSGD climbed 0.3% as it neared five-month highs.

The euro fell with the EURSGD at the lowest level since July.

The Japanese yen jumped higher as US interest rates fell. The JPYSGD jumped to two-week highs.

Europe in focus

The central bank focus continues tonight with the European Central Bank minutes due at 7.30pm .

With the euro recently weaker, a more optimistic reading of the European economy could lift the euro.

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