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.
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August 24, 2021
EUR/USD 1.1743 GBP/USD 1.3715 USD/CAD 1.2627 AUD/USD 0.7246 USD/JPY 109.65 USD/CNH 6.4738 USD/ILS 3.2176 USD/MXN 20.2966 USD/CHF 0.9126 USD/INR 74.1938 USD/BRL 5.3245 USD/SGD 1.3563 USD/DKK 6.3335 USD/SEK 8.7003 USD/NOK 8.8478
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.
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
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