The dollar edges slightly higher today amid drop in volatility; markets watch for Iran retaliation

The dollar is higher today versus G-10 counterparts amid a drop in volatility. Traders remain cautious as the world waits for Iran’s promised retaliation. Eurozone CPI rose mostly due to an increase in fuel prices. Economic impacts from the Australian wildfires are expected to hit GDP and could potentially lead to another rate cut.  

“Every drop in the ocean counts”
Yoko Ono
  • FX Rates
    January 7, 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

    The dollar edged slightly higher as volatility drops and asset prices rise as traders downplay recent threats of retaliation by Iran. Oil and gold gave back gains as markets speculated that Iran would be unlikely to hit against the US in a way that disrupts its own exports. Traders and markets will watch closely as the situation unfolds. November trade balance came in at -$43.1B versus -$43.6B leaving the dollar little changed against major counterparts.

    GBP

    The pound fell slightly today amid profit taking from investors. UK Parliament is set to return today from Christmas break. The Brexit deal is expected to pass in parliament this week where the conservatives hold majority before it moves to the House of Lords.

    EUR

    The euro is slightly lower. Eurozone CPI rose from 1% in November to 1.3% in December; fuel prices were the main driver.

    CAD

    The loonie fell versus the US dollar ahead of trade data in which the Canadian surplus with the US narrowed to C$4.2B from C$5.1B.

    ASIA/PACIFIC

    The Aussie dollar fell for the fifth straight day. Impacts from the Australian brush fires are sure to impact the domestic economy with a 0.4% minimum hit to GDP anticipated by AMP’s investment strategist Shane Oliver. The stalled growth could prompt another interest rate cut as early as February.

    China and the US are due to sign Phase I of a trade deal next week in Washington. China has agreed to increase purchases of U.S. farm products – exact figures were not disclosed.

Contact Us

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/trends-insights/foreign-exchange-advisory

Subscribe to receive the Daily FX Update in your inbox.

By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.

Kathryn Garvey
WRITTEN BY
Kathryn Garvey

Insights from SVB Industry Experts

 
SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.

Daily FX Update: Risk-on sentiment persists

 

Daily FX Update: Dollar falls to two-year lows amid month-end flows and vaccine optimism

 

Daily FX Update: Stocks and bonds mixed, dollar up slightly, copper soars

 

Daily FX Update: Dollar gains with focus on new virus restrictions

 

FX Daily Update: Markets quiet with focus on vaccine news

 

Daily FX Update: Markets retreat, retail sales disappoint