Daily
FX Update

The European Central Bank commits to low rates citing global trade concerns and Reserve Bank of India cuts rates

The US dollar is weaker this morning after a strong rebound yesterday afternoon.  Financial markets focus is on the ECB where a continued dovish tone cheered financial markets and boosted the euro.  Trump reiterated a threat to increase tariffs on Chinese and Mexican goods weakening the peso. 

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  • FX Rates
    June 6, 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

    The dollar is weaker vs. most currencies today after rebounding late yesterday.  FX traders seem to favor the safe haven Japanese yen and Swiss franc as too much uncertainty surrounds the US economy.  Donald Trump said “not nearly enough” progress was made in trade discussions with Mexico, raising the probability that a 5% tariff will take effect on Monday. Discussions will resume today.  
    The final reading for Unit Labor Costs for Q1 came in weaker than expected at -1.6%.

    GBP

    The British pound headed for a fifth day of gains vs. the US dollar despite politicians calling for a hard Brexit.  Michael Gove told a meeting of Conservative MPs that he is open to an extension of Brexit beyond the current October 31st deadline.
    All options seem to still be on the table from hard Brexit to second referendum.  Markets are not currently pricing in a hard Brexit.  Therefore a win by Brexit Party or a pro-Brexit prime minister would likely cause the pound to lose significantly.

    EUR

    The euro strengthened after the European Central Bank kept rates unchanged and extended the time they expect rates to remain at today’s ultra-low levels from 6 months to mid-2020.  The President of the ECB, Mario Draghi, is holding a regularly scheduled press conference this morning.  Draghi is due to retire this October with a successor yet to be named.
    The final reading for Q1 GDP for Eurozone came in as expected at 1.4%.

    CAD

    The Canadian dollar gained vs. the US dollar and seems to have broken a long-term weakening trend.  CAD has been steadily losing ground since early February even when the price of oil was on the rise. That trend seems to have now broken with the C-dollar searching for new highs vs. the US dollar.

    ASIA/PACIFIC

    The Reserve Bank of India cut its key benchmark interest rate by 25 basis points.  The rupee was unchanged from yesterdays close as the rate cut was anticipated.  Concern surrounding non-bank lenders was not discussed in the RBI announcement causing equities to drop.
    The Japanese yen traded at its strongest levels in 6 months as trade discussions between the US and Mexico show no progress and Trump reiterates threat to add to tariffs on $300B in Chinese goods.

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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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