FX Update

CPI data comes in softer than expected; US-China trade woes keep markets on edge

US CPI data came in weaker than expected driving the dollar lower. Trade concerns between the US and China are heating up again in advance of the G20 meeting at the end of the month. Ever present Brexit uncertainty keeps the pound from any strong upward movement.
“Was that a sly smile of the initiate, or a dumb smile of bluffing?”
Robert Silverberg
  • FX Rates
    June 12, 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
    Missed expectations on CPI data sent the dollar to the lowest level since April 15th. CPI came in at 1.8% vs 1.9% expected. Yesterday, President Trump said he is holding up the trade agreement with China and won’t sign a deal unless Beijing agrees to the terms negotiated this year. Home loan applications increased 26.8% in one week after mortgage rates dropped to the lowest levels in two years last week.
    Boris Johnson, the current favorite for PM, launches his campaign today. Johnson’s campaign states that the UK will be leaving the EU come Oct. 31 deal or no deal. There is a shift towards a potential motion that would prevent a no-deal Brexit. This motion would curb the new PM from bypassing parliament to move ahead with a no-deal Brexit. If the motion is passed, there would be a dialing back on no-deal Brexit concerns and this could provide additional support for the pound. The sterling is slightly higher this morning.
    A miss on US CPI data sent the euro higher. Yesterday’s comments by Trump that the euro was devalued vs the dollar dipped the currency briefly before rebounding. The euro has weakened 4% vs the US dollar over the last 12 months. 

    Slumped oil prices, trade concerns and weak equities put downward pressure on the Canadian dollar this morning.


    Beijing and Xi Jinping are in a tough spot with the US-China trade agreement. If Jinping caves to the US, he appears weak in his own country, but if he declines the meeting and agreement, he accepts the economic costs that come with a longer battle. Beijing has remained quiet on the matter thus far.

    Hong Kong protests over a controversial extradition law shut down part of the city. The political unrest spooked financial institutions sending equities lower.

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