FX Update

The dollar little changed overnight as market awaits US tax reform developments.

 |  December 01, 2017

The Senate vote on the tax bill was postponed last night to provide GOP members additional time to square differences. The dollar drifted slightly lower overnight but has rebounded in the European session as the market awaits the resumption of Senate voting, scheduled for 11AM ET. Traders appear less interested in economic data and more focused on the US tax vote, then Brexit and German politics for market direction.

“Without deviation progress is not possible.”

Frank Zappa
  • FX Rates
    December 01, 2017

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The market remains focused on the US tax reform bill which needs further refinement to progress to voting on the package later today. To attain votes, the Senate will likely refine details on a higher rate cut for Pass-Through entities and crafting a different approach to addressing deficit concerns.

    Treasury yields are up as lawmakers continue to refine the tax reform bill providing support to the greenback. The 10-yr yield returned to an upward trajectory back above 2.35%. 


    Sterling was heading for its biggest weekly gain since October but has trimmed gains on continued Brexit woes. The issue of the Irish border remains unresolved heading into the weekend, mounting pressure on Theresa May and her government ahead of her lunch meeting with Jean-Claude Juncker in Brussels on Monday. The DUP have threatened to compromise May’s government if they don’t back their position that there must not be control points between Northern Ireland and the rest of the UK. 


    Chancellor Angela Merkel held her first meeting with the opposition Social Democrat party in an effort to forge a new government. Reports have warned that talks between the rival parties could last until February.  

    The euro held initial gains while equities traded down but the single currency is drifting lower due to thin economic data from Eurozone countries today and as traders focus on US news and the dollar. November manufacturing readings from the Eurozone came in near expectations at 60.1.


    The Canadian dollar extended gains this morning pushing back through 1.28 after GDP and Jobs data bested estimates. Canadian GDP rose 0.2% MoM in Sept., versus a decline of -0.1% the previous month. YoY GDP came in as expected at 3.3%. The unemployment rate for Nov. improved far better than anticipated to 5.9% versus surveys at 6.2% on a net employment increase in jobs of 79.5K.


    USD/JPY rallied to fresh highs above 112.50 as US Treasury yields ticked higher.  The yen is also under pressure versus the dollar as equity euphoria prevailed this week.

    The Aussie dollar is under pressure on falling commodity prices, higher US Treasury yields and generally broader support for the US dollar and British pound. Thin economic data out of Australia this week also lent little support for the antipodean currency.

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Source: Bloomberg 2017

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About the Author

John Schweizer is a product and foreign exchange advisor with Silicon Valley Bank’s Global Financial Services Group, based in Boston, MA. He works with SVB clients who conduct business globally and advises on the products, strategies and solutions used to manage international transactions and cash flows and mitigate the risk associated with currency fluctuations.

John has over 25 years of financial services experience in global treasury and foreign exchange, encompassing trading, sales and marketing, and product advisory. Prior to joining Silicon Valley Bank, he worked at several financial institutions including BankBoston, TD Bank and Fidelity Investments.

John holds a B.A. in International Affairs from The George Washington University and a M.S. in Multinational Commerce from Boston University.
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