Demand for safe haven assets dampens on global recovery optimism

Cate Camerota

February 16, 2021

Demand for safe haven assets dampens on global recovery optimism

The US dollar weakened slightly against its peers as investors shifted away from risk-off trading. The continued hope for a global recovery based on the vaccine rollout has caused downward pressure on the greenback. Cold temperatures in the US have resulted in oil refinery shutdowns - driving crude oil prices higher.

Economic news this week:
Tuesday: Eurozone GDP
Wednesday: Canada CPI, UK CPI
Thursday: US Initial Jobless Claims, US Housing Starts

FX Rates
February 16, 2021

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.

EUR/USD

1.2103

GBP/USD

1.3884

USD/CAD

1.2691

AUD/USD

0.7749

USD/JPY

105.7400

USD/CNH

6.4268

USD/ILS

3.2405

USD/MXN

20.1882

USD/CHF

0.8923

USD/INR

72.6987

USD/BRL

5.3778

USD/SGD

1.3270

USD/DKK

6.1432

USD/SEK

8.2882

USD/NOK

8.4272

USD
The greenback fell as demand for haven assets diminished on optimism that fiscal stimulus in the US and the vaccine rollout will support a global economic recovery. The Bloomberg dollar index is down 0.2%.
GBP
Sterling climbed to 1.3952 after touching a fresh high not seen since 2018. GBP/USD approached the psychological level of 1.40 as virus concerns in the UK ease.
EUR
EUR/USD hit a one-week high of 1.2169 following pressure on the US dollar as markets were optimistic on a global recovery. The currency pair has since retreated from key Fibonacci level of 1.2170.
CAD
USD/CAD continues to trade within the 1.26 handle despite crude oil prices surging higher on the freeze in production. The cold weather in the US has caused refineries to shut down resulting in WTI oil trading near $60/bbl.
ASIA/PACIFIC
USD/JPY rose to highest level since Feb 8 as demand for safe haven assets dampened. New lockdown restrictions in New Zealand have not negatively effected the kiwi. The currency continues to trade near YTD highs as investors see the potential of lockdown easing to push the currency higher.

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 fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory

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Source: Bloomberg

This article is intended for U.S. audiences only.

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WRITTEN BY

Cate Camerota

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