Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
US markets fall further into correction
The US dollar was higher for a second day overnight as markets continued to worry about the potential for a US slowdown and the impact of tariffs.
US President Donald Trump again warned on further new tariffs overnight saying he would consider a 200% mark-up on European champagne, wine and spirits in retaliation for an EU tariff on US whiskey.
The S&P 500 fell 1.3% and now joins the tech-focused Nasdaq in correction territory – considered a drop of 10% from recent highs. The Nasdaq, down 2.0% overnight, is now down 14% from recent highs.
In FX markets, the USD index extended its rebound from four-month lows.
The EUR/USD fell 0.3%, GBP/USD lost 0.1%, USD/JPY dropped 0.2%.
The AUD/USD and NZD/USD both fell 0.5% while USD/SGD climbed 0.2% and USD/CNH gained 0.1%.
US sentiment deteriorates to 16-month low
The University of Michigan Consumer Sentiment is released at 1.00am tonight (AEDT).
In March, the University of Michigan Consumer Sentiment preliminary print probably decreased to 62.5, the lowest level since November 2023.
In terms of USD, the Fed’s caution on rate cuts (“not in a hurry to ease”) highlights limited downside risks for the USD in the medium term.
Looking at Asia, USD/SGD remains at the low end of a 30-day trading range.
There is growing expectations for potential MAS policy easing in April.
Our baseline is for a slight reduction in the S$NEER appreciation slope to 0.5% in April.
The next key resistance levels are at the 50-day 1.3439 and 200-day EMA 1.3400, where SGD buyers may look to take advantage.
UK GDP weakness might weigh on British pound
Today, UK monthly GDP will be revealed at 6.00pm AEDT.
We anticipate decreased output in January following an unexpectedly positive GDP in December (up 0.4% month over month).
AUD/GBP is now near March 2020 lows, trading in a 30-day tight range between 0.49-0.51.
Similarly for NZD/GBP at 0.44-0.46.
However, GBP/SGD is at the top at its 30-day trading range – an opportunity for GBP sellers.
USD higher for second day
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 10 – 15 March
All times AEDT
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*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.