Daily
FX Update

The US increased tariffs on Chinese goods today, markets showing a muted response

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President Trump has followed through with his threat to increase tariffs from 10% to 25% on $200 billion of Chinese goods. China said it will be forced to retaliate, though they have not done so at this time. According to Trump, talks are continuing today in a “very congenial manner, there is absolutely no need to rush.” Currency markets are largely unchanged following the announcement, equities are lower. This morning’s release of US CPI, which rose less than expected, has put the dollar on its back foot.

“Success is going from failure to failure without loss of enthusiasm.”
Winston Churchill
  • FX Rates
    May 10, 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

    US CPI data released this morning rose less than expected in April, pushing the dollar slightly lower. The core CPI, which excludes food and energy, rose 0.1% from the prior month, lower than the expected 0.2%. The broader CPI rose 0.3% m/m and 2% y/y, both less than expected. The US Congressional Budget Office monthly budget statement is released today, which may provide attention-grabbing insight into government spending and receipts.

    GBP

    The UK pound moved little overnight, still trading around the $1.30 level. A UK think tank, the National Institute of Economic and Social Research, estimates the UK economy will slow to 0.3% in Q2 from 0.5% in Q1, citing Brexit-related uncertainty, hindering forward planning by business and government.

    EUR
    The euro is higher following release of German export data, which unexpectedly rose to a new record high in March. The euro edged higher further after release of US CPI data.
    CAD

    Canada’s job gains rose a record 106k in April, boosting the Canadian dollar by nearly 0.6% to 1.34 on the news. Also, their unemployment rate improved to 5.7% from 5.8% and their hourly wage rate rose 2.3%.

    ASIA/PACIFIC

    The Chinese yuan remains weak as the trade war escalates. After an initial sell-off, the Chinese stock market rose today, as traders had factored in the tariff hike during this week.

    The Japanese yen moved little overnight, but remains attractive as a safe haven. USD/JPY continues to trade under 110.

    The Australian dollar is trading over $0.70 once again, despite pessimistic forecasts by the Reserve Bank in its quarterly policy statement released yesterday.

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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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