Daily
FX Update

Dollar mixed; Atlanta Fed Index lower than expected

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Volatility in Emerging Market currencies continued the dollar’s two-week strengthening trend. Nervousness over a trade war between the US and China is keeping markets on edge, but an uptick in the mood for risky assets has driven some dollar sellers back into the market.

Monday: March Final Japanese Industrial Production, German April PPI, US Chicago Fed Activity Index

Tuesday: OECD Economic Outlook, UK CBI Trend Reports, Eurozone Consumer Confidence, US Existing Home Sales, April Japanese Trade Balance

Wednesday: UK April CPI, Retail Price Index and PPI, Canadian Retail Sales, May 1st FOMC minutes, Japanese Preliminary May Manufacturing PMI

Thursday: German Final Q1 GDP, May Preliminary Manufacturing PMI, US May Preliminary Manufacturing PMI, April Home Sales

Friday: UK April Retail Sales, US Durable Goods Orders

  • FX Rates
    May 20, 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

    President Trump said that the EU, in terms of trade, treats the US worse than China. He also raised tensions with Iran by tweeting "If Iran wants to fight, that will be the official end of Iran.”

    The Chicago Fed Activity Index fell to -0.454 from 0.05 in March. Attention will be redirected to upcoming Fedspeak where inflation numbers remain the center of the debate.

    GBP

    The pound continued its decline as the breakdown in Brexit talks dragged on the currency. Opposition Brexit spokesman Kier Starmer said the government will have to include a public vote in any Brexit agreement. PM Theresa May said the revised withdrawal agreement will include new and improved measures, but Jeremy Corbyn has stated that there is no indication it will be changed much from the last bill. When PM Theresa May steps down, it looks as if Boris Johnson - the ex-Lord Mayor of London - could take her place.

    EUR

    Klaas Knot of the ECB said EU inflation is not where the ECB wants it to be. Knot added “The only thing we can do is to keep the pressure up, to make sure the economy continues to perform at high levels of capacity utilization and the economy continues to print GDP numbers in excess of potential growth”.

    Austria has called an unexpected election as the Vice Chancellor had to resign due to news he had promised government contracts in return for campaign funding.

    April German PPI rose to 0.5% m/m from -0.1% in March and to 2.5% y/y from 2.4%.

    CAD

    The Canadian markets are closed today for the Victoria Day holiday.  

    ASIA/PACIFIC

    The Japanese Q1 GDP rose to 2.1% due to a drop in imports. The Australian dollar strengthened after the unexpected election victory of the center-right coalition, which caused a 1% rise in the AUD.

    With US-China trade talks at a deadlock, attention has shifted to the Chinese government and its likeness to intervene with the yuan as it is approaching the 7.00 psychological mark.

    The Indian Rupee strengthened after Modi won the Indian election.

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

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About the Author

Laurence Hayward is the Senior Advisor for International Markets and Risk for Silicon Valley Bank in its Central Region. He is responsible for helping clients mitigate foreign exchange risk, including trade finance and international cash management.

Hayward has over 40 years in the foreign exchange and interest rate markets, with experience as a banker, broker, trader and marketer / advisor. He has worked in London, Abu Dhabi, Dubai, Singapore, Hong Kong, New York, Houston, Dallas, Santa Clara and Denver for Barclays International, First National Bank of Boston, Tullett and Tokyo Forex International, Gulf International Bank, NationsBank, Bank One, Cambridge Mercantile Corp. and Silicon Valley Bank. He has made presentations to the national AFP, the New Orleans AFP, the Houston TMA. Fort Worth Chamber of Commerce, the University of Colorado at Boulder, the KPMG Global Enterprise Institute in Denver, and many bank presentations on the subjects of foreign exchange, international risk, FASB accounting rules and quant analysis. He has also been published in the Wall Street Journal, the New York Times, and many periodicals.
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