The dollar is giving back yesterday’s modest gains despite global investors shifting toward a defensive strategy. Yesterday, Fed Chair Jerome Powell concluded two days of testimony before the Senate Banking Committee where his comments stressed the importance of bringing inflation down to the Fed's 2% target – even if it means causing a recession. Safe-haven Japanese yen and Swiss franc are stronger as FX traders and investors position for more challenging economic conditions.
“Without the weekend, where would the week be?”
-
FX Rates
June 24, 2022Rates 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/USD 1.0535 GBP/USD 1.2282 USD/CAD 1.2965 AUD/USD 0.6911 USD/JPY 135.08 USD/CNH 6.6840 USD/ILS 3.4300 USD/MXN 19.9005 USD/CHF 0.9545 USD/INR 78.33 USD/BRL 5.2523 USD/SGD 1.3880 USD/DKK 7.0564 USD/SEK 10.1395 USD/NOK 9.8915
-
USD
The dollar is weaker to close out the week. Swap markets are signaling that the market now sees the Fed hike cycle peaking in March. Current expectations are a 75 bps increase to be followed by a 50 bps increment, as the Fed aims to regain control of the inflation narrative.
University of Michigan Consumer Sentiment for June and New Home Sales for May are due out later this morning.
GBPThe pound gained on the day and the week with FX markets looking for comments later today from Bank of England officials. UK consumer confidence dipped in June to a record low amid surging prices. GfKs sentiment survey dropped to -41, the lowest reading in 48 years. Retail Sales for May fell 0.5% MoM beat expectations (-0.7%), down from a 1.4% gain the previous month.
EURThe euro gave up earlier gains after European Central Bank board member, Guindos, said economic growth in the eurozone could turn negative in 2023. Germany’s IFO survey could show a second month of outlook improvement with the expectations gauge seen rising to 87.4. The EU granted Ukraine candidate status in a historic first step to membership.
CADThe Canadian dollar weakened significantly throughout the trading day yesterday as investors favored haven currencies. The C-dollar is regaining some of yesterday’s loss in morning trading on the back of stronger oil prices. West Texas Intermediate is trading at $106/bbl and headed for the first monthly loss since November.
ASIA/PACIFICThe yen saw buying as FX traders took more defensive positions. Japan’s key inflation rate was unchanged at 2.1% in May staying above the BOJ’s 2% target.
The Chinese renminbi weakened for a second day vs. the US dollar. The PBOC injected $7.5 billion dollars in its biggest cash infusion since March 31, providing stimulus for an economy which in recent months has been stricken with omicron outbreaks.
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/foreign-exchange-advisory
| Source: Bloomberg | |
This article is intended for U.S. audiences only. ©2023 SVB Financial Group. All rights reserved. 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). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. The views expressed in this email 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, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. |
