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.
November 12, 2020
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
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:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory