Markets await Fed Chair Powell testimony while dollar takes back yesterday’s losses

The British pound is flat in volatile trading after having strengthened for 3 consecutive days. The UK outlined a plan to remove all Covid-related lockdowns by mid-June. The price of oil rises to highs of January 2020, helping the Canadian dollar approach a 3-year high. Weakness in tech stocks is leading to US dollar safe-haven buying, while some market participants wait on the sideline until Powell speaks later today.

“Things work out best for those who make the best of how things work out.”

John Wooden
  • FX Rates
    February 23, 2021

    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

    US Fed Chair Jerome Powell begins two days of testimony in front of Congress, beginning at 10am EST today. Markets will be listening for any comments related to potential inflation from fiscal stimulus spending and his reaction to recent increases in the UST yields. The US dollar is expected to sell-off on any comments from Powell indicating interest rates will remain ultra-low for extended periods.

    GBP

    The pound gave back earlier gains this morning after Prime Minister Boris Johnston outlined plans to remove lockdown restrictions in a phased approach. The pound is up 3% vs. the US dollar in 2021 and is within site of the April 2018 high at $1.4325.

    EUR

    The euro is slightly weaker this morning mostly on negative Covid news. Germany and France are both experiencing higher levels of virus cases compared to the UK and other EU countries. The result may be longer lockdown periods, thus holding back economic activity.

    CAD

    The Canadian dollar traded at its strongest levels since April 2018 as the price of oil continues to gain. The positive outlook for oil demand comes from vaccine roll-out expectations and oil supply constraints in the US after much of the nation’s production was shut when Texas froze last week. OPEC meets again next month with Russia expected to push for an increase in supply.

    ASIA/PACIFIC

    The Chinese renminbi is slightly weaker but remains in a tight trading range since the beginning of the year. Some FX market watchers believe the Chinese authorities are holding the USD/CNY rate steady as they wait to see how the relationship with the Biden administration develops.

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Peter Compton
WRITTEN BY
Peter Compton

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