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Daily
FX Update

Yesterday’s dollar rally gave back some ground as China expresses hope for trade settlement

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Calmer financial markets this morning saw the US dollar weaken after a very strong day yesterday. China struck a conciliatory tone in comments on trade discussions providing a relief rally in some global markets.  US economic data released this morning came in stronger than expected subsequently lifting the dollar.

“Wonder is the beginning of wisdom.”
Socrates
  • FX Rates
    August 15, 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

    Economic data including July retail sales, productivity and non-farm labor costs all came in significantly stronger than expected this morning, highlighting a conundrum for the Federal Reserve. That is, while the global economy weakens- leading the Fed to cut rates- the US economy is very strong, suggesting rates should remain at current levels. Yesterday the dollar gained strength throughout the day as equity markets around the world saw heavy selling.

    GBP

    The British pound is stronger today after UK retail sales for July came in better than expected at 3.3% YoY including automobiles.  Jeremy Corbyn wrote a letter to party leaders in parliament proposing a temporary government to pursue a Brexit deadline extension to avoid a no-deal exit. Keeping with Brexit, Germany’s Angela Merkel said on Wednesday that she wants “a withdrawal that will at the same time yield a close partnership between Britain and the EU member states“.

    EUR

    Eurozone economic growth slowed in Q2 as economies in the region lost steam. Germany’s export-driven economy contracted due to trade conflicts and uncertainty over Brexit, which manifested in the data.

    CAD

    The Canadian dollar is slightly weaker this morning despite private payroll numbers for July coming in much better than expected. Oil price is down again today.

    ASIA/PACIFIC

    The off-shore Chinese renminbi strengthened suddenly as China sold RMB bills in Hong Kong to make it harder for speculators to bet against CNH. Employment data from Australia were better than expected, boosting the local currency.
    The Japanese yen weakened some this morning as concerns abated regarding yesterday’s financial market losses.

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For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/foreign-exchange

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About the Author

Peter Compton is a senior foreign exchange advisor for Silicon Valley Bank’s global financial services group, and has been with SVB since 2007. He helps clients design and implement hedging strategies for foreign currency exposures. Compton has over 20 years experience in global financial markets.

Before joining Silicon Valley Bank, Compton spent seven years working in the European equity markets. Based in Germany, he spent four years with HSBC and three years as Head of Equity Sales for ABN-AMRO in Frankfurt. Prior to his work overseas, Compton spent seven years with Bank of America in San Francisco as an equity and fixed income derivative specialist.

Compton holds a bachelor's degree in business and management from the University of Rhode Island and a Master's of Business Administration from San Francisco State University.
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