Better risk appetite leads to lower dollar, higher stocks and bond yields

Better risk appetite leads to lower dollar, higher stocks and bond yields

Investors shifted to a risk-on mood on news that Trump is considering a tax cut on capital gains, unexpectedly upbeat German investor confidence, and Russia’s claim that they found a Covid-19 vaccine. The US dollar moved lower across the board, the Russian ruble leading the way. Other safe havens, gold and the Japanese yen, are lower and US Treasury yields moved higher. The Stoxx Europe 600 Index is having its best day in a week. US equities are set for a higher open.

“You will face many defeats in life, but never let yourself be defeated.”
Maya Angelou, American poet
  • FX Rates
    August 11, 2020

    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 index is down about 0.35% overnight and in the red against every major currency except the Japanese yen. The risk-on mood in the markets is increasing demand for foreign assets and currencies, and away from the safe haven dollar and US Treasuries. News that Trump may cut capital gains fueled the buoyant mood, as did Russia’s claim of a Covid-19 vaccine.


    The pound is higher in-line with other foreign currencies against the dollar, despite release of economic data that showed that employment dropped the most since the height of the country’s lockdown. The pound may have shown strength versus the dollar, but is increasingly weak against the euro, declining nearly every day in August. Bank of England Deputy Governor Dave Ramsden said the BOE will increase quantitative easing if a slowing economy warrants it, increasing the odds of negative rates according to many traders.


    The euro gained overnight in-line with other foreign currencies. Investors remain bullish on the euro after the recent €750 billion European Union recovery package was agreed on, which they believe represents a game-changing event for Europe. In Germany, the ZEW Indicator of Economic Sentiment for August increased again significantly versus the previous month. The forward-looking indicator says that experts expect to see a general recovery over the coming six months, especially in the domestic sectors.


    The Canadian dollar made gains amid higher oil prices and broad US dollar weakness. News that President Trump may cut capital gains taxes lifted all risk assets and foreign currencies. Better-than-expected Housing Starts in Canada for July released this morning pushed the USD/CAD below 1.33.


    Emerging market currencies gained for the first time in four days amid the risk-on mood in the markets. Over the last week, political conflicts in several EM countries have given investors cause for concern. The USD/CNY edged lower and looks set to reach last week’s 6.9360 low. The Japanese yen moved little overnight, holding near the 106 level. Markets in Japan are quiet with the start of the Obon Festival, a family reunion holiday.

Contact Us

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
See all of SVB's latest FX information and commentary at

Subscribe to receive the Daily FX Update in your inbox.

By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at You can withdraw your consent at any time.

Scott Petruska, CFA
Scott Petruska, CFA

Insights from SVB Industry Experts

SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.

Daily FX Update: Dollar set to finish trading higher for a second week


Daily FX Update: EUR climbs higher following decision from ECB


Daily FX Update: Risk-off trading continues, USD supported


Daily FX Update: USD remains strong against peers


Daily FX Update: FX markets trade on Covid related news


Strong US Retail Sales drives dollar and stocks higher