Dollar firm, equities lower in risk-off mood

The dollar is holding on to 2-month highs and foreign equities are lower as the risk-off mood continues to drive markets. A confluence of risk factors is pushing investors into the safety of the dollar. Today, focus was on depressing Covid-19 news and the tighter measures around the world to contain it, Fed Chair Powell’s urging of Congress to provide more fiscal stimulus, and Trump’s statement that he wouldn’t commit to a peaceful transfer of power if Biden wins the election. This morning’s Initial Jobless Claims remain elevated. US Treasury yields are steady, oil and gold are both lower.

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  • FX Rates
    September 24, 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

    This week’s rally in the dollar remains intact, the dollar is holding its highs against peer currencies. The risk-off mood in the markets is being fueled by an overwhelming number of risk factors around the world and is driving demand for the safe haven dollar. Today’s Jobless Claims data was not uplifting news. Traders await speeches today by six different Federal Reserve members and testimonies by Fed Chair Powell and Treasury Secretary Mnuchin before the Senate banking committee.

    GBP

    The pound dipped below $1.27 briefly, its lowest level in more than two months. Investors are dealing with a surge in UK coronavirus cases and the stalled EU-UK Brexit negotiations. The Bank of England governor Andrew Bailey speaks today, with investors looking for signs that negative rates are on the horizon.

    EUR

    The euro dropped for the fifth straight day and to fresh two-month lows amid broad US dollar strength. News that the ECB provided another round of ultra-cheap funding totaling €175bn to eurozone banks also weighed on the currency.

    CAD
    The Canadian dollar fell to seven-week lows amid broad US dollar strength. PM Trudeau vowed to do “whatever it takes” to get Canada through the pandemic. He said his government will begin an initiative to create 1 million jobs in Canada through a “range of tools, including direct investments in the social sector and infrastructure, immediate training to quickly skill-up workers, and incentives for employers to hire and retain workers.”
    ASIA/PACIFIC

    Asian equities were all in the red amid the risk-off mood with investors. The USD/CNY was set higher versus the dollar, the weakness in the yuan was in-line with others.

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Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

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