FX Update

Financial markets expect Fed to cut rates tomorrow and will scrutinize comments for future rate moves

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The FX markets are quiet with the US dollar giving back early morning gains. Most market practitioners are focused on tomorrow’s Federal Reserve rate announcement and Friday’s Non-Farm Payroll numbers for October. 

“In principle, I am against principles”

Tristan Tzara, Romanian poet
  • FX Rates
    October 29, 2019

    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
    Yesterday on Wall Street, equities reached new highs, fueled by optimism of a trade deal with China and expectations of an additional rate cut from the Federal Reserve at tomorrow’s meeting. Earnings season has been strong, but the dollar has been flat to slightly weak on safe-haven asset selling. House prices in the US came in slightly weaker than expected.
    The pound rallied in volatile trading again this morning after the opposition party agreed to an early election. FX markets now expect a negotiated Brexit as the most likely scenario or perhaps a second referendum vote.

    The euro is stuck in a tight 1.10-1.11 range vs. the US dollar while hitting record highs vs the Norwegian krone. 

    The EU granted a “flextension” for the UK to withdraw from the member bloc by Jan 31 2020, however, they are happy to bring the date forward if a deal is fully agreed in UK parliament.


    The Canadian dollar continues to rally and has now hit a 3-month high relative to the US dollar, despite oil prices falling by over 1% this morning. Markets expect the Fed to cut rates and the Canadian central bank to leave rates unchanged tomorrow resulting in a 1.75% benchmark rate for both countries.


    Inflation in Japan remained flat for October, with YoY CPI ex-fresh food increasing 0.5%, missing forecasts. The data is unlikely to alter the near term path of policy for the Bank of Japan who are expected to hold rates steady at Thursday’s meeting.

    The Australian dollar gained vs. most all currencies as risk-on sentiment led speculators to buy the A-dollar and sell safe-haven currencies like the US dollar and Swiss franc.

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Peter Compton
Peter Compton

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