The dollar is stronger versus most of its peers regardless of many institutions joining recent bets to profit from a dovish shift in Fed policy. The euro gave back earlier gains resulting from the development of an anti-crisis tool by the ECB and a speech by President Lagarde. A spotlight is on the Canadian dollar this morning as PM Trudeau indicated expansion of energy infrastructure.
“We aim above the mark to hit the mark.”
June 28, 2022
EUR/USD 1.0517 GBP/USD 1.2208 USD/CAD 1.2855 AUD/USD 0.6932 USD/JPY 136.17 USD/CNH 6.7098 USD/ILS 3.4346 USD/MXN 19.9615 USD/CHF 0.9569 USD/INR 78.7863 USD/BRL 5.2044 USD/SGD 1.3876 USD/DKK 7.0738 USD/SEK 10.1244 USD/NOK 9.8117
The Bloomberg Dollar Index, a gauge which tracks the performance of ten leading global currencies vs. the USD, is higher despite recent speculation of a slowdown in the US on higher interest rates. Fed officials have emphasized that inflation is the driver of policy going forward and Treasury yields responded overnight but pared off through the Asian session.GBP
GBP is weaker on overall US dollar strength and the UK government passed the first stage of abandoning parts of the Northern Ireland Protocol, an element of the Brexit deal which has and will continue to undermine the pound.EUR
The euro reversed earlier momentum on positive reports of an ECB plan to drain cash from the banking system to offset bond purchases made to confine borrowing costs for euro members. Hawkish comments by Governing Council member Martin Kazaks were neutralized by ECB President Lagarde vowing nimble policy.CAD
The loonie is on course for its strongest level against the dollar in two weeks as German leaders indicated hopes to shift its energy reliance towards Canada. PM Trudeau indicated that Canada may expand its energy infrastructure to support Europe.ASIA/PACIFIC
The yen strengthened early along with Treasuries as recession fears encouraged demand for haven assets, but risk bias reversed, along with the currency, after the London session began.
The AUD gains after China cut its mandatory quarantine period to 10 days from 3 weeks for inbound visitors in its most recent COVID-19 guidance.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory
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