Daily FX Update: Dollar adds to yesterday's gains

Peter Compton

November 12, 2020

Virus impact on global economies sends investors to sidelines and supports safe-haven dollar, yen and franc.

Risk-off sentiment helped the dollar advance this morning as markets await central bank comments. Later today the heads of three central banks will speak at the ECB Forum. Focus will be on the Bank of England head, Andrew Bailey, as markets look for clues on more monetary easing at next month’s BoE meeting. Fed Chair Powell and the ECB’s Lagarde are also scheduled to speak.

“The question isn’t who is going to let me; it’s who is going to stop me.”

Ayn Rand

FX Rates
November 12, 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.

EUR/USD 1.1792
GBP/USD 1.3157
USD/CAD 1.3132
AUD/USD 0.7259
USD/JPY 105.21
USD/CNH 6.6201
USD/ILS 3.3740
USD/MXN 20.5459
USD/CHF 0.9151
USD/INR 74.65
USD
The dollar is slightly stronger this morning on risk-off, safe haven buying. The dollar was helped by weekly unemployment claims coming in lower than expected as did continuing claims. The Consumer Price Index for October came in at 1.2% slightly lower than the 1.3% expected.
GBP
The pound weakened on overall dollar strength and a Q3 GDP number of 15.5% coming in weaker than expected. In the second quarter, the British economy shrunk by almost 20%. The soft deadline of November 15 for an EU/UK trade agreement is fading as an update is not expected until next week. A December 17 BoE meeting could see the central bank cut the overnight benchmark rate from 0.10% into negative territory which could potentially weaken the pound.
EUR
The euro is slightly stronger as markets await comments from European Central Bank head Christine Lagarde who speaks later this morning at the ECB Forum. The ECB meets December 10 with markets expecting additional quantitative easing measures to support the Eurozone economy.
CAD
The Canadian dollar weakened for a third day despite stable oil prices. OPEC is discussing a delay to supply increases as global demand for oil remains muted due to Covid.
ASIA/PACIFIC
Strong Japanese retail sales figures supported the yen in overnight trading as did overall risk-off sentiment.

The Indian rupee weakened after consumer inflation data came in at 7.6% - the highest in six years. The central bank is now expected to keep rates on hold at next month’s meeting.

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

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 PrivacyOffice@svb.com. You can withdraw your consent at any time.

Source: Bloomberg

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

©2021 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.

The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.

Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.

WRITTEN BY

Peter Compton

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.

Global bond yields soften driving risk-on equity buying, dollar is mixed

Scott Petruska, CFA

Nervous bond market helps dollar

Peter Compton

Daily FX Update: Dollar selling resumes

Peter Compton

Daily FX Update: Pound and dollar stronger on improved economic outlook

Peter Compton

Daily FX Update: Dollar gains as Tech stocks take a hit

Peter Compton

Daily FX Update: Dollar weaker to start the week

Peter Compton