Daily
FX Update

President Trump walks back tariffs on Mexican imports, risk-on sentiment returns

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The tariffs that were slated to go into effect against Mexican imports were walked back as an immigration deal was struck between the two countries. Weak data out of the UK adds pressure to the already pressured pound. Central banks have started to assure economies they have plans to protect economies as the US-China trade war wages on.

Monday: Italy Industrial Production MoM,  UK Industrial Production and Manufacturing, CA Housing Starts

Tuesday: UK Jobless Claims Change, NFIB Small Business Optimism, PPI Final Demand MoM

Wednesday: MBA Mortgage Applications, CPI

Thursday: German CPI, US Jobless Claims

Friday: US Retail Sales, Industrial Production

  • FX Rates
    June 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
    The dollar gained this morning after the President walked back the tariffs on Mexican imports which were slated to go into place today. The cancellation happened after Mexico pledged to offer tougher immigration enforcement at the US Southern border – specifics of the deal were not released. The Mexican peso jumped 2% on the news. The deal clears a path for the USMCA trade agreement to move forward.
    GBP
    The pound is lower this morning and on track for its biggest daily slide in a month following data that GDP in the UK fell by .4% in April. The pound dropped by .6% and concerns about the health of the UK economy surfaced. Conservative leaders will launch their official campaigns for Prime Minister this week. The pound remains pressured on Brexit uncertainty as all leading candidates pledged to leave the EU by 10/31 with or without a deal.
    EUR

    The euro is slightly weaker this morning as dictated by the USD gains. Italy remains a source of uncertainty and volatility with the center of debate on the country’s opposition to EU’s fiscal rules.

    CAD

    The resolution between the US and Mexico helped CAD as well as the return of global risk-on positions. Oil prices have remained supported providing a boost for the loonie. CAD strength hit a three-month high in Asian hours.

    ASIA/PACIFIC

    The Bank of Japan’s Governor Haruhiko Kuroda told Bloomberg that the central bank could deliver more monetary stimulus if necessary but that it doesn’t need to act now. The comments showed that the BOJ is starting to plan for protective actions to take as the US-China trade war continues.

    The Chinese yuan slipped to the weakest this year after imports fell 8.5% May. Exports rose 1.1% unexpectedly though some suspect the uptick could be a symptom of front loading shipments to avoid higher US tariffs.

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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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About the Author

Kathryn Garvey is a foreign exchange Associate for Silicon Valley Bank’s global financial services group and has been with SVB since July of 2018. Prior to SVB Kathryn completed co-op internships at Innosight, Market Metrics, and The TJX Companies.

Garvey graduated from Northeastern University in 2018 with a bachelor’s degree in finance, and marketing with elective coursework in entrepreneurship and innovation from Northeastern University.

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