REGION:

Daily
FX Update

The Pound Sinks on Brexit “Deadlock” while the Catalonia situation heats up. 

 |  October 12, 2017

USD weakens slightly after Federal Reserve minutes showed continued caution over the timing of more interest rate increases.  Tone has now shifted from hawkish to dovish.  G-10 currencies trading sideways as market participants are awaiting U.S. Inflation data.

"Concentration comes out of a combination of confidence and hunger."

Arnold Palmer
  • FX Rates
    October 12, 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.

    EUR/USD1.1851
    GBP/USD1.3146
    USD/CAD1.2479
    AUD/USD.7817
    USD/JPY112.32
    USD/CNH6.5812
    USD/SGD1.3540
    USD/MXN18.7860
    USD/CHF.9748
    USD/INR65.0875

  • USD

    Dollar Spot Index was hardly changed after falling 0.3% Wednesday.  Donald Trump is meeting this week with Stanford University economist John Taylor, who is on the shortlist of Fed Chair replacements.
    Oil halts three days of advances near $51 a barrel.  Gold heads for fifth day of gains, its longest winning streak since May, as USD holds losses after minutes of FOMC’s meeting showing rising concern about low inflation.  Treasuries gained overnight as a result of the dovish response from the Fed.

     

    GBP

    The pound headed lower after EU’s chief Brexit negotiator, Michel Barnier, said that the UK and EU have reached “a state of deadlock” on the divorce bill.  GBP had rallied against the USD after FOMC meeting minutes, but was quickly muted by these stumbling negotiations with the EU, pulling it back below $1.32 against the greenback.  
    BOE’s latest prognosis on consumer credit showed that the UK’s banks are heeding governor Carney’s warning of “pockets of risk” and reining in unsecured lending. 

    EUR

    EUR hit a day high of 1.1880 only to meet take-profit interest after London stepped in.  Market participants are now waiting for U.S. data to reevaluate positions.  ECB’s governing council agrees no rate hike until end of QE.  Eurozone Aug Industrial Production m/m: 1.4% vs. 0.6% est. 
    Catalonia looking for negotiations rather than immediate independence. Catalonia’s PM Rajoy starts process that could lead to suspending Catalan government.     

    CAD

    The Canadian Dollar has bounced back from its 3-day low, sitting just below 1.25. The New Housing Price Index has seen a drop to .1% MoM, its lowest increase in 6 months.
    NAFTA talks are underway in Washington with Prime Minister Trudeau trying to convince Trump of free-trade benefits. These attempts don’t seem to be working, which can be seen from Trump’s current comments around the deal.

    ASIA/PACIFIC

    Japanese markets benefit from cheap Yen and sentiment that Prime Minister Abe will stay in power. 
    The AUD has advanced against the USD overnight, ahead of Australian Economic releases next week (Employment Change, Unemployment Rate).  China has developed a payment system for CNY and Russian Ruble transactions to reduce risks and improve the efficiency of foreign transactions.  South Korea’s annual inflation has increased to the fastest in more than five years.


Contact Us

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.  
See all of SVB's latest FX information and commentary at www.svb.com/foreign-exchange

Subscribe to receive the Daily FX Update in your inbox.

By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Policy. If you have privacy questions, you may contact us at privacy@svb.com. You can withdraw your consent at any time.

Source: Bloomberg 2017
(*)

© 2017 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB).

The views expressed in this article are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.

Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. Opinions expressed are our opinions as of the date of this content only. The material is based upon information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such.

0758-0917

Now Let's Get Started

See how Silicon Valley Bank makes next happen now for entrepreneurs like you.

Connect With Us

Log in to SVB.com