Key Clips

Key overnight events:

  • The Fed kept rates on hold last night, as expected, and scaled back forecasts for how high interest rates will rise this year, citing the potential impact from weaker global growth and financial market turmoil on the US economy.
  • Adopting a more-dovish-than-expected tone, the Fed’s dot plot implied only 2 hikes in 2016, down from 4 previously while economists were expecting 3; the projected rate path for 2017 and 2018 were also lowered.
  • Broad US dollar weakness ensued, as the Bloomberg Dollar Spot Index dropped the most since 3rd Feb. The S&P 500 Index climbed 0.6% to close at its highest level since 31st Dec, led by mining and energy stocks.
  • WTI front-month futures soared 5.8% last night to settle at $38.36/bbl after some OPEC members agreed to meet with other producers on 17th April in Doha for talks on freezing oil production; data also showed that US crude stockpiles increased less than anticipated last week.
  • CPI for February came in at -0.2% month-on-month, as expected; consumer prices excluding food and energy rose 0.3% month-on-month, higher than the estimated 0.2%. Industrial production fell 0.5% month-on-month, lower than the 0.3%-drop forecasted.

 

USDSGD:

  • Spot 1.3660
  • Overall non-oil domestic exports rose 2.1% year-on-year, beating the 0.8% drop predicted. Exports to EU rose 16% while shipments to China fell 1.2%.
  • Spurred by broad US dollar weakness, USDSGD fell by as much as 1.4% to a low of 1.3612 earlier today, its lowest level since July last year.
  • The currency pair is currently trading around 1.3650 which represents the 38.2% retracement of the rally from Jul 2014 low to the Jan 2016 high.

 

AUDUSD:

  • Spot 0.7605
  • AUDUSD rallied more than 2% to as high as 0.7619, a level last seen in June last year.
  • Assistant Governor Guy Debelle said that the RBA would welcome a “slightly lower exchange rate”, as most central bankers would as well, in “helping the rebalancing” of Australia’s economy.
  • Australian data released this morning showed that employment increased by 300 in February, missing the estimate of a 13,500 gain; the jobless rate came in at 5.8%, lower than the forecast of 6.0%.

 

USDCAD:

  • Spot 1.3095
  • On the back of USD weakness and oil’s surge, USDCAD dropped to 1.3071 this morning, the lowest in 4 months. The Canadian dollar has gained more than 10% against the dollar since its weakest close of 1.4634 in January this year.
  • A break below the psychological 1.3000 handle, and the next support level lies at 1.2832.

 

USDCNH:

  • Spot 6.4957
  • The PBOC strengthened its reference rate by 0.32% to 6.4961, ending a 3-day weakening run.
  • USDCNH sank to 6.4801 last night as the currency pair continues to fluctuate around 6.5000. It has largely traded within the range of 6.4800 – 6.5200 for most part of March.
  • A spokesman for the Ministry of Commerce announced that China will further relax rules for foreign investors to enter services sectors such as finance and education.

 

USDNOK:

  • Spot 8.4526
  • USDNOK fell back towards its 200-day moving average of 8.4223, helped on by dollar weakness and oil strength.
  • Norges Bank is due to announce its deposit rates later today; with a 25bp cut to 0.50% expected.

 

© Jachin Capital Pte Ltd

UEN: 201419754M

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