Optimism around the reopening economy sends dollar lower and stocks higher

The reopening of the global economy led to optimism as the trading week begins in the US. The dollar fell to its lowest point since mid-March or about the time lockdown became national. Financial markets seemed to ignore saber-rattling between the US and China over the weekend. The British pound strengthened despite negative sentiment around the upcoming UK/EU trade talks.

Economic Data for this Week:

Wednesday: US Federal Reserve Beige Book

Thursday: GDP Q1 second reading (4.8%) and Durable Goods for April

Friday: PCE inflation data and Personal Spending for April

  • FX Rates
    May 26, 2020

    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 dollar weakened on optimism for the global economy despite much better than expected new home sales in the month of April. The dollar is now at its lowest point since March 16 vs. a basket of currencies and has now given back much of the gains enjoyed as the global lockdown was being implemented.

    GBP

    The pound rallied versus the dollar despite uncertainty around the June 1 kick-off of trade talks between the UK and the European Union. Also, Prime Minister Boris Johnson's government sustained a scandal over the weekend as his lead advisor, Dominic Cummings, ignored lockdown requirements to travel across the country.

    EUR
    The euro strengthened on overall dollar weakness. The common currency has often stalled when rallying to the 1.0980 level. If the euro punches through the 1.10 level, it could reach for new highs.
    CAD

    The Canadian dollar touches 2-month highs as global economies reopen amidst coronavirus vaccine optimism. BoC Governor Poloz will speak to a Senate committee this afternoon as traders will look for any helpful commentary before Friday’s GDP print.

     

    ASIA/PACIFIC
    Yesterday’s PBOC currency fix against the USD was the weakest since 2008. This move stems from deepening US/China trade tensions and exacerbated relations with Hong Kong.
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Peter Compton
WRITTEN BY
Peter Compton

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