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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Peter Compton
WRITTEN BY
Peter Compton

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