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Dollar higher as virus concerns hit markets worldwide

The dollar, yen and Swiss franc all made gains overnight, serving as safe-haven currencies after global markets sold off. Concerns about the spread of the coronavirus dominates global news. There is a full economic data calendar this week, and the Fed and Bank of England meet.


Monday: Germany IFO Business Survey (Jan) / Census Bureau reports New-Home Sales (Dec)
Tuesday: Conference Board releases Consumer Confidence Index (Jan) / Case-Shiller 20-City Home Price Index
Wednesday: Federal Reserve meets
Thursday: Bank of England announces monetary policy decision / US advanced estimate for Q4 GDP Growth
Friday: UK Brexit Day / US Personal Income (Dec)

  • FX Rates
    January 27, 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 index gained overnight, as investors dumped equities, commodities and foreign currencies amid worries about the coronavirus. Increased demand for safe-haven bonds drove UST 10-year yields down to 1.62%. The Fed meets this week and they are expected to hold rates steady.

    GBP

    The UK pound is slightly lower as traders focus on Thursday’s Bank of England meeting. Odds are near 60% for a rate cut amid economic uncertainty related to Brexit. Friday is Brexit Day, when the UK officially leaves the EU. Amongst other issues, the deal says the UK will leave the EU ‘customs union’ and have the right to develop new trade agreements with other countries around the world.

    EUR

    The euro made early gains following news in Italy that a key regional vote did not support a candidate of far-right Matteo Salvini’s party. Also, credit agency Fitch upgraded Greek debt, which led to an all-time low in yield of 1.13% in 10-year Greek sovereign bonds.

    CAD

    The Canadian dollar weakened by 0.25% overnight due to a broadly stronger US dollar, lower commodity prices, and a downward revision of Canada’s job data for 2019.

    ASIA/PACIFIC

    The Chinese yuan fell slightly and Asian equities collapsed on fears of further spreading of the coronavirus from China.
    The Japanese yen made gains as a safe-haven currency amid growing virus fears.

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/foreign-exchange

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About the Author

Scott Petruska is Chief Currency Strategist and senior advisor for Silicon Valley Bank’s global financial services group, and is based in Boston, MA. He advises clients on currency and interest rate hedging strategies, and helps them with other aspects of global banking. He regularly writes blogs on topics covering the global financial markets, conducts client seminars and webinars, and speaks at regional financial conferences.

Petruska has more than 30 years experience in the currency and interest rate markets, and has lived and worked in Boston, Chicago, New York City, Singapore and Tokyo. Prior to joining SVB in 2009, he worked at several large international financial institutions, including National Westminster Bank, Irving Trust, Bank of New York, State Street Bank and Commerce Bank. He has been an institutional trader, product developer, analyst, salesperson and advisor.

Petruska has been awarded several professional designations, including the CFA (Chartered Financial Analyst), FRM (Financial Risk Manager) and CMT (Certified Market Technician). He earned his undergraduate degree in Finance & Banking from the University of Wisconsin.

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