Risk appetite remains largely positive to start the day as investors read any talks between Russia and Ukraine as constructive and reducing the chance of the war spreading to other countries. The dollar continues its sell-off from yesterday with government bond yields in the US stable but rising in Europe and elsewhere. The price of oil is up providing strength to the Canadian dollar which has gained 3% vs. the US dollar since March 8.
“You must never be fearful about what you are doing when it is right.”
March 30, 2022
EUR/USD 1.1126 GBP/USD 1.3154 USD/CAD 1.2463 AUD/USD 0.7520 USD/JPY 121.8400 USD/CNH 6.3605 USD/ILS 3.1805 USD/MXN 19.8816 USD/CHF 0.9260 USD/INR 75.9113 USD/BRL 4.7371 USD/SGD 1.3538 USD/DKK 6.6852 USD/SEK 9.2930 USD/NOK 8.6356
The dollar weakened for a second day and has now given back almost all month-to-date gains. ADP private payrolls data for the month of March came in at +455K vs. the +450K expected with the prior month revised up 11K to 486K. USD showed little reaction to the strong jobs data as investors look toward Friday's Non-Farm Payroll numbers for March. Strong employment data from ADP and non-farm payrolls could embolden the Fed’s aggressive approach to monetary policy.GBP
The British pound gained on the dollar as UK gilt yields moved higher. The UK is debating delaying planned checks on imports from the EU for a fourth time, as it seeks to avoid adding fresh costs into supply chains. Prices in UK shops accelerated to 2.1% in March — the fastest annual pace since September 2011, the British Retail Consortium said.EUR
The euro is stronger as government bond yields increased closing the gap with US Treasuries. Spanish March inflation hit 9.8% vs. estimates at 9.1%. The Spanish data offered an insight into the continent's inflation outlook as did Germany’s CPI release of +7.3%. Investors are pulling forward expectations of rate increases by the European Central Bank thereby supporting the euro.CAD
The Canadian dollar continues to benefit from higher energy prices. Oil is up this morning as Russia reiterates demands that payment for oil exports be made in Russian rubles – something other countries have already said is impossible under the terms of existing contracts.ASIA/PACIFIC
After peaking at just under 125 on Monday, the Japanese yen has strengthened. Japanese bonds climbed with the yen after the BOJ surprised investors by pledging to buy more securities than planned and include longer-dated debt.
China’s renminbi continues to regain the losses suffered due to COVID related lockdowns announced over this past weekend. The PBOC said they will keep the yuan exchange rate at a reasonable, balanced level.
This article is intended for U.S. audiences only.
©2023 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.