Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Greenback lower as FX intervention looms
The US dollar was mostly lower across Asia on Monday after a waning from a key Japanese currency official sparked fears around potential FX market intervention.
Japan’s vice finance minister Masato Kanda described recent moves as “speculative” after the USD/JPY pair traded above 150 last week. The phrasing echoed previous warnings ahead of FX market intervention from Japan’s Ministry of Finance.
The USD index fell, down 0.2%, with the greenback lower in most major markets.
The USD/JPY lost 0.1%, EUR/USD gained 0.2% while GBP/USD climbed 0.3%.
The AUD/USD jumped 0.4% while the kiwi continued to underperform as it gained 0.2%.
The USD/CNH fell 0.2% while USD/SGD lost 0.3%.
Singapore IP growth to pick up
With the global tech rebound and low base effects from pharmaceutical output, we project Singapore’s industrial production (IP) growth to pick up to 2.4% year-on-year in February from 1.1% in January, driven by improved electronics output growth.
This suggests sequential IP growth accelerated to 10% month-on-month seasonally adjusted in February from -5.7% in January. The Monetary Authority of Singapore is expected to wait for the Fed’s move since they only meet four times a year.
We hold a mild negative view on the Singapore dollar that could help the USD/SGD drive back to major resistance at 1.3500.
US consumer confidence to decline
US consumer confidence is due later tonight and looks likely to decline by 1.7 percentage points to 105.0 in March after decreasing in February.
The preliminary University of Michigan consumer sentiment index also fell in March. Rising gas prices since the year’s start and an unexpected unemployment rate increase in February, impacting the labor differential reported, likely contributed to the decline.
The USD index has recently turned near four-month highs.
USD/JPY sees greenback turn from highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 25 – 29 March
All times AEDT
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
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