FX Update

Tax plan passes the Senate, Brexit announcement expected, possible Bank of Canada rate hike

 |  December 04, 2017

The new Senate tax bill made it through and will now go to the house, with markets expected to rally.  New Brexit announcements are expected in Brussels, while several countries set new monetary policy this week.

Economic Releases:
12/5: Trade Balance
12/6: ADP Employment Change
12/7: Initial Jobless Claims

  • FX Rates
    December 04, 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 dollar has made a strong start this week after the Senate passed the tax-overhaul plan early Saturday morning. The markets welcomed this good news after news out of Washington regarding Flynn.  The U.S. faces a partial government shutdown after money runs out on December 8th if Congress can’t agree on a spending bill by then.


    The British Pound has appreciated slightly against the USD. A Brexit breakthrough appears imminent as Theresa May arrived in Brussels for a lunch with both the E.U. and U.K. planning to make a statement. The only UK data out today is UK construction PMI, consensus was for 51, and actual was 53.1.  


    The Euro has retreated slightly against the US Dollar overnight. The Euro-area finance ministers are set to discuss a vote for a new president and debate Greece’s bailout (Greece GDP numbers release today).  Angela Merkel continues to hold discussions with the Social Democrat party, however, this is expected to take many months before a conclusion is reached.


    CAD is holding near its one month high vs the USD as odds of a BoC rate hike Wednesday are 20% after solid employment data Friday indicating a more upbeat outlook. BoC rate decision is in focus this week after last week’s stellar employment data. WTI is lower with Saudi oil minister saying cuts will remain until the market is balanced.  PM Trudeau and the Chinese Premier agree to begin exploratory talks on free trade agreement.


    JPY weakens as a result of the U.S. pro-corporation tax reform passing.  The move was fueled partly by general USD buying and Yen recent out performance. Looking ahead the RBA rate decision and Australian data will be closely watched as they’re widely expected to keep the rates unchanged on Tuesday (1.5%). Considering weak wage growth and lack of inflationary pressure, there is little push for a hike at the moment. 

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Source: Bloomberg 2017

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