UK Prime Minister voting gets underway; oil tanker attack drives WTI futures higher
Kathryn Garvey | June 13, 2019
Voting on the new Conservative party leader began today in the UK with Boris Johnson taking a clear lead. Attacks on two oil takers off the coast of Iran drove oil prices higher this morning. US data came in softer than expected showing a cooling off period in the economy and raising the potential for a rate cut this year.
“When the whole world is silent, even one voice becomes powerful.”Malala Yousafzai
June 13, 2019
EUR/USD 1.1274 GBP/USD 1.2691 USD/CAD 1.3321 AUD/USD 0.6912 USD/JPY 108.47 USD/CNH 6.9332 USD/ILS 3.5965 USD/MXN 19.1701 USD/CHF 0.9936 USD/INR 69.5137
In an address yesterday, President Trump declined to set a deadline for new tariffs on $325B of Chinese goods. Weaker than expected inflation data yesterday has boosted the chance of a fed rate cut coming by September. Jobless Claims rose to five week highs of 222,000 showing signs of a potential cooling-off in the labor market. The dollar is slightly higher this morning.GBP
Sterling is slightly higher this morning following the MP’s first round vote today to elect a new party leader. Boris Johnson won 114 votes from fellow MPs to move onto the next round. Six additional candidates won the at least 17 votes required. Further ballots will then continue until two candidates are left, at which point Conservative party members will vote. Johnson’s softer tone yesterday regarding wanting to be friends with Europe placated those fearing a no-deal Brexit and in turn supported the pound.EURThe euro is slightly lower but tracking sideways this morning as it is taking direction from US-China trade dynamics. Italian Deputy PM Di Maio has said he will “do what Italians need” when asked if Italy would finance planned tax cuts through a budget deficit and that Italy seeks dialogue with the EU.CADAn attack on two oil tackers off the coast of Iran sent WTI futures higher by 3% and Brent contracts jumped 3.4%. The commodity tied CAD gained some momentum on the news.ASIA/PACIFIC
The Hong Kong dollar is slightly higher this morning and Hibor rates soared to their highest levels in ten years. Soaring rates were attributed to increased demand for the HKD in advance of upcoming corporate dividends and IPOs. Calm returned to Hong Kong as protesters dispersed overnight. The government postponed the reading of the extradition bill for the second time.
For more analysis on FX markets or information regarding SVB's FX services:
Subscribe to receive the Daily FX Update in your inbox.
Thank you for subscribing to SVB's Daily FX Update.
You’re almost done. Please check your email box and follow the instructions to confirm your subscription. If you did not receive an email please check your Spam or Bulk E-Mail folder just in case the confirmation email got delivered there instead of your inbox. If so, select the confirmation message and mark it Not Spam, which should allow future messages to get through. We also suggest you whitelist the svb.com domain.
Please note that we will continue to send you communications that we need to send you (for example, to keep you updated on operational changes to your account, a product or a service) or that we are required to send you by law.
This article is intended for U.S. audiences only.
©2018 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.