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Daily
FX Update

Global stocks and the US dollar gain after Trump/Xi tariff truce

Stocks made gains globally and the US dollar moved higher as financial markets took a risk-on tone following a meeting by Trump/Xi at the G20 summit. The leaders agreed to a trade war truce and to resume talks towards a deal. Safe havens gold, yen, and the Swiss franc all retreated.

Monday:  Canadian bourses are closed in observance of Canada Day.  US Institute of Supply Management (ISM) releases Manufacturing Index for June.  US Construction Spending for June
Tuesday:  Reserve Bank of Australia announces monetary policy decision
Wednesday:  US stock markets close early, 1pm EST, and bond markets at 2pm EST.  ADP releases National Employment Report for June.  US Trade Balance for May
Thursday:  US stock and bond markets are closed in observance of Independence Day
Friday:  Bureau of Labor Statistics releases June jobs report

  • FX Rates
    July 1, 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

    Dollar strength was seen across the board, fueled by the belief that the Fed will not cut rates in July since geopolitical risks related to the US/China trade war have subsided. The week is filled with economic news, which should be useful for the data-dependent Fed on setting monetary policy. Odds are currently 80% that the Fed will cut rates by 25 bps at their next meeting on July 31.

    GBP

    The UK pound fell in-line with other currencies versus the strong dollar and from unexpectedly weak UK manufacturing data. Traders are listening closely to prime minister candidates Jeremy Hunt and Boris Johnson as they continue to reveal their Brexit plans.

    EUR

    The euro dropped to a two week low, spurred by: overall dollar strength following the Trump/Xi tariff truce; weaker than expected European PMIs; and diminishing prospects that Germany’s Jens Weidmann will replace ECB President Draghi. Weidmann is considered a monetary hawk, which would have supported the euro.

    CAD

    The Canadian dollar moved little over the weekend. Today is Canada Day, “A day which celebrates the anniversary of July 1, 1867, the effective date of the Constitution Act of 1867, which united the three separate colonies of the Province of Canada, Nova Scotia, and New Brunswick into a single Dominion within the British Empire called Canada.” Wikipedia.

    ASIA/PACIFIC

    The Chinese yuan gained versus the dollar following the weekend’s Trump/Xi trade truce. Traders quickly reversed short CNY positions, which had been built up in anticipation of China weaponizing (weakening) their currency in the on-going tariff/trade war with the US. Today marks the 22nd anniversary of the handover of Hong Kong from British sovereignty to Chinese rule.
    The USD/JPY moved up from the mid-107’s to the mid-108’s. The yen’s safe haven status was reversed (at least temporarily), as geopolitical risks were tempered from the US/China trade truce.

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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