Daily
FX Update

Calm returned to the markets overnight, the dollar backs off recent highs

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The dollar moved off its recent highs against peer currencies, as calm returned to the financial markets. Asian equity markets sold off slightly, European markets edged higher, but overall there was little movement. Global bonds yields remain near their lowest levels since 2017. US-China trade tensions are high with possibilities of China cutting exports of rare-earth minerals to the US.

“That man is prudent who neither hopes nor fears anything from the uncertain events of the future.”
Anatole France, French poet
  • FX Rates
    May 30, 2019

    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

    Markets took a breather overnight, with the dollar backing off recent highs. Equity markets edged higher and bonds held steady, reducing the dollar’s demand as a safe haven.

    GBP

    The UK pound is trading near recent lows. Pressure on the pound remains high following the resignation of PM May, as the odds increase for a “hard” Brexit – leaving the EU without a deal. Former mayor of London and ex-Foreign Secretary Boris Johnson, a passionate Brexiteer, is the frontrunner to replace May.

    EUR

    Light activity was seen in European financial markets. German markets were closed for Ascension Day, and there were no important economic releases or events in the eurozone.

    CAD

    The USD/CAD dropped back below 1.35 following a rally in oil above $59. An industry report showed a bigger-than-expected decline in U.S. oil reserves.

    ASIA/PACIFIC

    The Chinese yuan moved little overnight, despite Chinese media raising the prospect of China cutting exports of rare-earth minerals. China supplies 80% of US imports of such commodities used in the defense, energy, auto and electronic sectors. China also announced they have put purchases of US soy products on hold. Separately, the People’s Bank of China injected $36 billion into China’s financial system to fill a funding gap following the surprise seizure of a local bank with serious credit risks. The move also was meant to provide a strong signal to markets that they stand ready to safeguard liquidity as sentiment in both the credit and bond markets is shaky.

    ILS

    A political shake-up in Israel has led to a weakening of the Israeli shekel. Recently re-elected PM Benjamin Netanyahu had failed to form a coalition government within its six-week time limit, so Israeli’s parliament voted to dissolve itself. New elections are scheduled to be held on September 17th.

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Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
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About the Author

Scott Petruska is Chief Currency Strategist and senior advisor for Silicon Valley Bank’s global financial services group, and is based in Boston, MA. He advises clients on currency and interest rate hedging strategies, and helps them with other aspects of global banking. He regularly writes blogs on topics covering the global financial markets, conducts client seminars and webinars, and speaks at regional financial conferences.

Petruska has more than 30 years experience in the currency and interest rate markets, and has lived and worked in Boston, Chicago, New York City, Singapore and Tokyo. Prior to joining SVB in 2009, he worked at several large international financial institutions, including National Westminster Bank, Irving Trust, Bank of New York, State Street Bank and Commerce Bank. He has been an institutional trader, product developer, analyst, salesperson and advisor.

Petruska has been awarded several professional designations, including the CFA (Chartered Financial Analyst), FRM (Financial Risk Manager) and CMT (Certified Market Technician). He earned his undergraduate degree in Finance & Banking from the University of Wisconsin.

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