Daily
FX Update

Anxiety related to expanding US trade wars drives global equities and bond yields lower, the dollar weakens slightly

Market anxiety related to ever-expanding US trade wars drove global equities and bond yields lower. The S&P, Dow Industrials and Nasdaq 100 all point to a lower open today. Safe haven buying of bonds and gold was seen, but not so the dollar. The dollar weakened slightly overnight against its peers with growing concern of trade-related economic decline in the US. This week is chock full of US economic data releases.

Monday: April Manufacturing Purchasing Managers’ Index (PMI), forecast is 53. April Construction Spending, forecast is 0.4%.
Tuesday: April Factory Orders, forecast is 0.9% decline.
Wednesday: May National Employment Report, forecast is a 178,000 gain in private sector.
Thursday: European Central Bank announces its monetary policy decision, expected to keep its key rate at negative 0.40%. April US International Trade Balance, forecasted to be a $50 billion trade deficit.
Friday: May Unemployment Rate, forecast 3.6%. May Nonfarm Payrolls, forecast 183,000

  • FX Rates
    June 3, 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 edged lower against its peers as investors continue to see lower bond yields and Fed rate cuts. JP Morgan Chase expressed concern that the trade war will crimp economic growth. President Trump expanded US trade wars by removing India from its special trade status with the US.
    This week is chock full of economic data, which may influence traders’ expectations for future Fed rate cuts. April PMI is released today, and is expected to be the 121st consecutive month of economic expansion in the manufacturing sector.

    GBP

    The UK pound remains soft, as Brexit uncertainty plagues the currency, and after the announcement that UK Manufacturing declined for the first time in nearly three years.
    On Friday, Theresa May will step down as Conservative party leader, but remains as Prime Minister until a new leader is chosen.
    Today, President Trump and the First Lady begin a three-day state visit to the UK.

    EUR

    The euro moved higher in line with other currencies against the US dollar, despite Factory Output for the Eurozone falling to near a six-year low.

    CAD

    Higher oil prices led to the USD/CAD falling back below 1.35. Key Canadian economic data will be released on Thursday: April Leading Indicators and May Manufacturing PMI.

    ASIA/PACIFIC

    Both the Japanese yen and Chinese yuan changed little since Friday’s close. Traders still expect strength in the yen from safe haven flows, and a weaker yuan from US-China trade tensions.
    On Friday, China and Hong Kong markets are closed in observance of the Dragon Boat Festival.

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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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