Although unlikely to change the course of the Fed’s presumptive plans to begin reducing bond purchases (tapering), tomorrow’s CPI data will be watched closely for any surprises. This week's US economic data will be scrutinized as investors try to anticipate the timing of the Fed's reduction in monetary stimulus. Philadelphia Fed President, Patrick Harker, mentioned tapering sooner rather than later sending the dollar higher overnight.
Economic Data for this Week:
Tuesday: CPI for August
Wednesday: Empire Manufacturing Survey and Industrial Production for August
Thursday: Retail Sales for August, Weekly Initial Jobless claims, Philly Fed Business Outlook, Business Inventories for July
Friday: University of Michigan Consumer Sentiment Survey for September
September 13, 2021
EUR/USD 1.1799 GBP/USD 1.3839 USD/CAD 1.2652 AUD/USD 0.7367 USD/JPY 109.98 USD/CNH 6.4527 USD/ILS 3.2071 USD/MXN 19.8625 USD/CHF 0.9212 USD/INR 73.68 USD/BRL 5.2265 USD/SGD 1.3421 USD/DKK 6.6034 USD/SEK 8.6258 USD/NOK 8.6477
The dollar gained against a basket of currencies over Friday's session and into this morning.
Over the weekend, Democrats in Washington proposed an increase in the corporate tax rate from 21% to 26.5% while the top tax on dividends for individuals would increase from 20% to 25%. The increases, while less than those proposed by President Biden, would present a headwind to equity gains if passed. At this point, many investors expect the tax increases will be cut further to gain passage by Congress.GBP
The pound is weaker this morning on overall US dollar strength. The UK will abandon plans to require proof of vaccination to enter certain venues and may soon also drop the mandatory testing for travelers.EUR
The euro traded well below 1.18 and is now at its weakest level relative to the dollar since late August. The dollar strength comes as investors await this week’s heavy economic data releases.
In last night’s TV debate, German candidates aimed to close the gap in the race to becoming Germany’s new chancellor. A snap poll saw 41% judging Scholz the winner with just 27% favoring Laschet.CAD
The Canadian dollar is weaker this morning despite the price of oil hitting its highest level since early August. WTI rose above $70/barrel while 50% of the US Gulf of Mexico production remains shut after hurricane Ida and ahead of hurricane Nicholas.ASIA/PACIFIC
The Chinese renminbi weakened slightly on news of more state intervention in large tech companies.
The Australian dollar is stronger on higher commodity prices as the price of aluminum hits a 13-year high.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory
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