Dollar continues decline for second day

Dollar continues decline for second day

The dollar continued to lose ground after last week's gains as investors and speculators come back into the markets. The Federal Reserve symposium this Thursday and Friday is leading to muted trading in financial markets as investors await any possible central bank announcements. The British pound weakens as FX traders adjust expectations for next month's Bank of England meeting while the Canadian dollar continues to follow oil prices higher.

“I didn’t get there by wishing for it or hoping for it, but by working for it.”

Estee Lauder
  • FX Rates
    August 24, 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.


  • USD

    The US dollar continues to follow significant risk-on/risk-off trading. Last week was risk-off and the dollar strengthened all week. Today is day two of risk-on and the dollar continues to drift lower. See SVB Asset Management slides highlighting the risk-on/risk-off paradigm.  SVB Q3 Eco Outlook

    Data on New Home Sales for July will be released later today.

    GBP

    The pound is weaker this morning as FX traders take positions in front of the Federal Reserve's Jackson Hole symposium which begins Thursday. Also, the Bank of England meeting on September 23 is anticipated to include a more hawkish stance by the central bank. Yesterday’s weaker than expected Markit PMI surveys showed the UK’s economic recovery slowed in August. The slowing economy may cause investors to rethink their expectations of a more hawkish Bank of England.

    EUR

    The final reading for Q2 GDP for Germany helped lift the euro. The German economy grew at 1.6% which was better than the 1.5% expected. Government spending was also higher at 1.8% vs. the 0.9% expected. 

    CAD

    The Canadian dollar strengthened for a third day as the price of oil is higher.  After falling 9% last week, the price of oil is now down only 2% since August 16.

    ASIA/PACIFIC

    The Chinese renminbi finished Asian trading flat but gained on the greenback during European and early US trading. Some FX traders are awaiting the Fed’s Jackson Hole symposium scheduled for Thursday and Friday.

    The central bank of New Zealand signaled a readiness to begin monetary policy tightening - lifting the kiwi and, in sympathy, the Australian dollar.

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Peter Compton
WRITTEN BY
Peter Compton

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