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Daily
FX Update

Dollar hits YTD highs as traders await Powell’s speech today

The dollar reached new highs for the year following hawkish comments by Fed members ahead of today’s speech by Fed Chair Powell at the Jackson Hole summit. The UK pound rallied after news of a possible Brexit breakthrough. China imposed retaliatory tariffs on US soy bean and crude oil imports.

“There is no greatness where there is not simplicity, goodness and truth.”
Leo Tolstoy, War and Peace
  • FX Rates
    August 23, 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

    The dollar index reached new highs for the year as three Fed members voiced resistance to further rate cuts. Traders await more clarification from Fed Chair Powell’s speech later today. China’s retaliatory tariffs pushed the dollar in safe haven reaction, but US equities look to open lower on the news.

    GBP

    The UK pound soared following optimistic Brexit news. In his first foreign trip as prime minister, Boris Johnson met with German Chancellor Angela Merkel and French President Emmanuel Macron. The response was reportedly upbeat, with both Merkel and Macron saying that a solution to the Irish backstop can be found in 30 days. Some of sterling’s strength was given back when EU officials repeated the message that the basic divorce deal is not changing.

    EUR

    The euro traded down to new lows for the year following Fed members' hawkish monetary policy statements and China’s escalation of the trade war with announcement of retaliatory tariffs on US soy beans and crude oil imports.

    CAD

    The Canadian dollar is weaker overnight from overall US dollar strength, but traded off its lows following better-than-expected Retail Sales in Canada. MoM sales for June were unchanged at 0.0%, which compared favorably to the expected -0.3%; and Ex-Auto Sales gained 0.9%, above expectations of 0.0%.

    ASIA/PACIFIC

    China surprised markets by announcing tariffs on $75 billion of US imports in retaliation for President Trump’s planned tariffs on Chinese imports. The tariffs will commence in two stages, on September 1 and December 15. It mirrors the timetable that the US laid out for its planned 10% tariffs on $300bn of Chinese imports. An extra 5% tariff on US soybeans and crude oil imports will start next month and a 25% duty on US cars will start December 15.
    The Japanese yen moved off earlier lows as markets shifted into risk-off mode following news of the China tariffs on US goods.

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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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