Global Themes

Greenback slips as US shutdown to drive action

The USDSGD slipped back to the lows overnight as a better than expected result from Chinese growth boosted the local currency while worries about a potential US government shutdown hit the greenback.

The Singapore dollar was boosted by strong global growth data.

From China, fourth-quarter GDP was 6.8% in annual terms, above the 6.7% predicted. Chinese forecasts for 2018 were raised to 6.9%. Commodities gained.

Euro gains

In other markets, the AUDSGD was up 0.1%.

Australian employment growth in December saw 35k new jobs and wrapped up the best year for job growth since 2005.

The euro continued higher, with the Swiss franc also stronger, as markets continued to focus on the potential for the European Central Bank to soon end its stimulus program.

Shutdown countdown

In the near term, markets will be focused on Washington DC as the US government attempts to pass its final budget bill.

The US faces a government shutdown if the spending bill is not passed. At present, government funding is due to end at midnight Friday (1pm Saturday).

The risk is for a weaker US dollar that could see the USDSGD fall further.

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