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Daily FX Update

Scott Petruska, CFA

Dollar higher as virus spreads

The dollar nudged higher as the coronavirus continues to spread. Deaths in China related to the virus reached 100 and more than 4,500 others have been infected in more than a dozen countries. Safe-haven buying of the Swiss franc and Japanese yen has slowed, but Asian equities are still under fire and global bonds are well bid, the US Treasury 10-year yield dropped to 1.60%. Oil rose slightly, but commodity prices in general have been falling as investors grow increasingly concerned about global growth being affected by the virus.

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  • FX Rates
    January 28, 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 moved higher as the ultimate safe haven currency. The virus has spread from Asia to Europe, keeping pressure on currencies in those regions. US equity futures are poised to open higher as markets recoup from the recent sell-off. US Treasury 10-year yields dropped briefly to four-month lows at 1.57%. Traders await the Fed’s first meeting of the year, with expectations that rates will be kept unchanged.

    GBP

    The UK pound fell nearly to $1.30 as traders prepare for Thursday’s BoE decision, when a cut in rates is still a possibility.

    EUR

    The euro fell nearly to $1.10 overnight, its lowest since December 2, but in-line with broad dollar buying. Germany confirmed their first case of the coronavirus.

    CAD

    The USD/CAD currency pair is unchanged overnight, but only after first spiking just above 1.32, its highest level since early December. Ontario confirmed their first case of the virus.

    ASIA/PACIFIC

    The Chinese yuan gained slightly after the People’s Bank of China issued a statement about providing ample liquidity to China’s financial markets when they reopen on February 3.
    The Japanese yen was actively traded with swings related to changes in risk appetite associated with the coronavirus. Japanese health officials confirmed seven people are infected with virus.

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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