Risk-on hits US dollar and helps commodity currencies

Risk-on hits US dollar and helps commodity currencies

The dollar is stronger versus the safe haven Japanese yen and Swiss franc, but weaker against commodity currencies such as the Australian dollar. FX markets will be watching the Federal Reserve’s FOMC statement and press conference on Wednesday for any comments on inflation expectations. The US dollar has steadily lost ground versus a basket of currencies since the start of April.   

Economic Data for this Week:

Tuesday: S&P House Price Data for February, Conference Board Consumer Confidence for April

Wednesday: FOMC Rate Decision

Thursday: Weekly Initial Jobless Claims, Q1 GDP and PCE deflator index

Friday: Personal Income for March, PCE for March, Consumer Confidence for April

  • FX Rates
    April 26, 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 is generally weaker to start the week as commodity currencies gain and Durable Goods Orders for March (+0.05%) came in weaker than expected (+2.3%). The Bloomberg US dollar spot index hit a two-month low overnight as the price of copper hit a 10-year high and iron ore surged. Risk-on sentiment is hurting the dollar as equity markets climb and investors look beyond the surge in Covid cases in places like India and Brazil.


    The pound is flat versus the dollar this morning after having been significantly higher during London trading. Speculators may be adding to already sizable long-pound/short-dollar positions as the UK has now vaccinated half its population and investors look toward significant growth over the next couple quarters.


    The euro gave back early gains which showed the common currency trading above 1.21. The euro is up 3% versus the greenback for the month. Germany’s IFO index for April was weaker than expected causing FX speculators to sell the euro thereby locking in gains.


    The increasing price of commodities, especially copper, lifted the Canadian dollar relative to most currencies. Covid concerns took a back seat as investors look beyond vaccine roll out and position for strong commodity prices and a strong Canadian dollar.


    The Indian rupee held its ground just below 75 despite a surge in Covid cases and deaths over the weekend. Prime Minister Modi has yet to call for a nationwide lockdown although some local authorities have announced restrictions.

    The Japanese yen is down 4.5% versus the US dollar for the year mostly as safe haven currencies have been weaker. The Australian dollar surges on higher iron ore prices.

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Peter Compton
Peter Compton

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