Concern for slowed growth supports haven currencies
Data out of the US and China caused concerns of slowing growth which supported haven currencies. Later this week, the Federal Reserve will host a symposium at Jackson Hole. Commentary from Federal Reserve Chairman Powell regarding his views around strong employment data and any change to his previous standpoint that “substantial further progress” is still needed ahead of any bond tapering will be watched closely.
Economic Data for this week:
Tuesday: US Retail Sales, UK Jobless Claims, Eurozone GDP
Wednesday: Australian Unemployment, UK CPI
Thursday: US Initial Jobless Claims
August 16, 2021
EUR/USD 1.1782 GBP/USD 1.3858 USD/CAD 1.2561 AUD/USD 0.7330 USD/JPY 109.1300 USD/CNH 6.4769 USD/ILS 3.2182 USD/MXN 19.8553 USD/CHF 0.9120 USD/INR 74.2475 USD/BRL 5.2558 USD/SGD 1.3555 USD/DKK 6.3121 USD/SEK 8.6550 USD/NOK 8.8358
USDData out of the US released on Friday showed a drop in consumer confidence. This resulted in a shift for global risk appetite as investors remain concerned about a growth slowdown. Safe haven currencies including the US dollar strengthened on the news.GBPThe British pound remains largely unchanged versus the greenback as risk appetite for global markets wanes following data out of the US and China. A busy week of UK data is expected to impact sterling; focus will be on labor market report Tuesday, inflation data Wednesday and retail sales Friday.EUROne-month implied volatility for EUR/USD is at its lowest level since February 2020. This is signaling that traders are betting that volatility for the currency pair will stay low despite upcoming meeting for the Fed and the European Central Bank in September.CAD
The Canadian dollar weakened versus the US dollar amidst lower commodity prices including oil. USD/CAD is trading about 0.3% higher, the largest gain in more than a week. WTI crude is down 1.75%.ASIA/PACIFIC
The Japanese yen, along with other haven currencies, advanced as investors are concerned about slowed growth and ahead of the Federal Reserve’s symposium in Jackson Hole later this month.
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
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