The FX markets are in a wait-and-see mode ahead of the Federal Reserve's virtual Jackson Hole symposium which starts tomorrow and culminates with a Jerome Powell speech on Friday. A third day of stronger oil prices could not help the Canadian dollar as most all currencies sold off relative to the US dollar – including other safe-haven currencies.
“I have nothing to offer but blood, toil, tears and sweat.”
August 25, 2021
EUR/USD 1.1732 GBP/USD 1.3704 USD/CAD 1.2636 AUD/USD 0.7247 USD/JPY 110.01 USD/CNH 6.4755 USD/ILS 3.2288 USD/MXN 20.3264 USD/CHF 0.9151 USD/INR 74.2437 USD/BRL 5.2590 USD/SGD 1.3546 USD/DKK 6.3388 USD/SEK 8.7185 USD/NOK 8.8596
The US dollar gained despite Durable Goods orders for July being interpreted as worse than expected. Investors are betting that weaker data will lead the Federal Reserve to hold off on tapering/rate hikes.GBP
The British pound is weaker vs. the US dollar as financial markets await Fed Chairman Jerome Powell’s speech on Friday. Wages in the UK have been rising and investors anticipate the Bank of England will begin to sound more hawkish in upcoming speeches and meetings and in turn help support the pound.EUR
The euro is poised to again rely on the 1.17 support level as the dollar marches higher. Despite economic data expected to show the eurozone economy outpacing the US in Q3, the euro remains under pressure.CAD
A third day of higher oil prices could not stop the Canadian dollar from weakening. FX markets are favoring the US dollar over most all currencies – especially in front of Jerome Powell's speech this Friday.ASIA/PACIFIC
The Chinese renminbi is flat this morning after gaining on the US dollar the past two days. The RMB is trading in a range between 6.45 and 6.5 with FX markets watching closely the two central banks. The renminbi may be under pressure if the Fed signals tapering/rate increases sooner than expected.
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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