FX Update

Dollar balances dovish FOMC expectations and mounting trade concerns

The Bloomberg Dollar Index continues to advance as solid US economic data conflicts with expected dovishness at tomorrow’s FOMC meeting. Haven currencies maintain support after Trump starts today’s US-China trade negotiations with a series of tweets criticizing China’s purchases of US agricultural goods. PM Johnson exasperates Brexit concerns sending both sterling and euro lower.
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  • FX Rates
    July 30, 2019

    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.

  • USD

    Strong data supports the dollar ahead of the highly anticipated FOMC policy announcement on Wednesday. Sturdy personal income numbers and last week’s GDP reading has slightly influenced traders to discount expectations for more aggressive monetary easing. Market positioning is currently for a 0.25% cut from the central bank.

    The pound has depreciated close to 3% since Boris Johnson became PM on July 24. Johnson declared that “the withdrawal agreement is dead” and warned that unless the EU renegotiated, Britain will leave on October 31 without a deal. His “do or die” approach has ramped up expectations of a hard Brexit, sending sterling to its lowest level in over two years.
    A relatively quiet start to the week for the region, the euro weakens on the back of a stronger dollar. French GDP data released this morning showed a quarter-over-quarter slowdown. Further weakness in eurozone data will solidify the ECB’s guidance for a September rate cut and most likely drive the common currency lower.

    The loonie settles below its one-month high touching nine-month lows at 1.3016 earlier in July. BoC officials are closely examining developments in the energy sector and impact of trade conflicts to mold their forward guidance. The benchmark rate was held at 1.75% at June’s meeting.


    The Japanese yen firms up as US Treasury yields dip and traders flock to haven assets. BoJ officials met market expectations after leaving asset purchases and future policy guidance unchanged.

    Investors await developments from the China-US negotiations starting today. Trump fired off a series of tweets this morning criticizing China’s lack of US agricultural purchases. Economists will also be watching China’s Manufacturing PMI numbers out overnight.

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