Dollar higher, equities lower to end another risk-off week

For the fourth straight week, the risk-off mood in financial markets has pushed the dollar higher and risky equities and commodities lower. US 10Y Treasuries are stuck in a 0.65% - 0.70% range. Depressing Covid-19 news in Spain and France weigh on the euro and European equity markets. There is new optimism for a Democratic fiscal stimulus bill, and traders await the first of three US presidential debates next Tuesday, September 29.

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  • FX Rates
    September 25, 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 reversed earlier losses and is headed for its best week since April, fueled by the risk-off mood that began early in the month. An increase in European coronavirus cases and further inconsistencies in the UK government’s response to the virus weigh on euro and pound. Lower commodity prices are hurting the “commodity currencies,” including the NOK, MXN, RUB and BRL.

    GBP

    The pound is little changed overnight, and has suffered less than most of its peers versus the dollar this week. The inconsistent and incoherent coronavirus policy by the UK government, and the stalled UK-EU Brexit negotiations weigh on the pound.

    EUR

    The euro is lower for the fifth straight day on the back of the depressing coronavirus news out of Spain and France. The euro is currently trading below $1.1650, its lowest level since late July.

    CAD

    The Canadian dollar is headed for its worst weekly performance versus the US dollar since June. Lower oil, gold and other commodity prices are weighing heavily on Canada and the loonie.

     

    ASIA/PACIFIC

    The USD/CNY finished an up week that technically reversed last week’s big down move, and may, in fact, end up reversing a downtrend that’s been in place since early June. Yesterday, the FTSE Russell, a major index provider for investors worldwide, said it will add Chinese government bonds to its flagship World Government Bond Index beginning in October next year, which will bring at least $100 billion into China.

     

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Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

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