Covid-19 vaccination delays support USD and safe havens
The US dollar maintains momentum strengthened against peers for a third day as traders move towards risk-off. The US equity market saw its biggest one-day decline in more than three weeks amidst concern of a delay in Covid-19 vaccinations. The EUR also fell following news of a statement by a ECB policymaker pushing back on the strength of the common currency.
“If you think good thoughts they will shine out of your face like sunbeams and you will always look lovely.”
January 27, 2021
EUR/USD 1.2095 GBP/USD 1.3681 USD/CAD 1.2794 AUD/USD 0.7677 USD/JPY 104.04 USD/CNH 6.4930 USD/ILS 3.2670 USD/MXN 20.2425 USD/CHF 0.8896 USD/INR 72.9185
The Bloomberg Dollar Index continues to trade higher for the third consecutive day. The safe haven greenback strengthened as US equities had their biggest one-day decline in more than three weeks. The US 10-year Treasury yield is at lowest level since Jan 6 at 1.02%.GBP
Earlier in the trading session, sterling touched a high not seen since 2018, trading up to $1.3759. The currency has since retreated against the USD amidst broad dollar strength.EUR
EUR/USD hit a session low of $1.2098 after comments from ECB policymaker Klas Knot stated that the ECB hasn’t reached the lower bound on interest rates and he pushed back against the strength of the currency. Lower EUR/USD is supported by broader market trends as investors move towards risk-off trading.CAD
USD/CAD is trading stronger and hit a daily high of 1.2775. The loonie weakened against its counterpart as US equities fell and as traders are cautious ahead of the Fed’s rate decision later today.ASIA/PACIFIC
The Japanese yen advanced earlier in the session with USD/JPY hitting a low of 103.59 as investors speculated that the Japanese government could extend emergency declaration in an effort to contain the virus.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory