Dollar gains with focus on new virus restrictions

For the first time in a week, the US dollar is opening higher. Investors are moving into the dollar primarily as a safe haven play, as focus changed overnight to soaring Covid-19 cases and on new restrictions on individuals, cities and countries to contain it. This morning’s US labor data was disappointing: Initial Jobless Claims for the week ending November 14 came in at 742K, compared to expectations of 700K. It was the first time in five weeks that applications for US state unemployment benefits rose. Equities and US Treasury yields are both opening slightly lower. Oil and gold prices are trading lower.

“…a nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.”
Abraham Lincoln, Gettysburg Address, November 19, 1863
  • FX Rates
    November 19, 2020

    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

    Overnight, the dollar edged higher across the board. The higher open this morning was the first such time in six trading days. Global investors have refocused attention on accelerating cases of the pandemic which is spurring tough new restrictions both here and abroad – New York City announced they are closing schools, South Australia began one the world’s tightest lockdowns and Tokyo raised its virus alert after daily infections reached 500 for the first time. US equities are opening 1% lower, US 10-Year Treasury yields are 0.86%.

    GBP

    The UK pound fell for the first time in a week, as pressures increase with the ongoing UK-EU trade talks. EU leaders are pushing the European Commission to prepare for a “no-deal” outcome as the December 31 deadline approaches.

    EUR

    The euro is lower by 0.2% in-line with broad dollar strength. Much of the EU is in lockdown amid a second wave surge of the pandemic. However, Hungary and Poland are blocking the $2 trillion in disbursements related to EU’s economic relief package, as they both argue against linking any transfers to the “rule of law” – basically, a fight against the EU’s core democratic values.

    CAD

    The Canadian dollar outperformed most other G-10 currencies, but edged lower in-line with broad US dollar strength. Oil prices have slightly lower after firming during the entire month of November.

    ASIA/PACIFIC

    The South Korean won led Asian emerging market currencies lower, as its government showed concern with the recent gains in the currency. SK’s Finance Minister said it will take active measures “at any time” to stabilize the currency.

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Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

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