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Dollar higher in quiet markets on mixed bullish news

The dollar edged higher in quiet markets and on a combination of mildly bullish news – signing of phase 1 of the US-China trade deal, JPMorgan’s record quarterly earnings in Q4, and the Japanese yen trading over 110 per dollar for the first time since last May. Washington’s lifting of the ‘currency manipulator’ label on China had little impact on markets. This morning’s US Core Consumer Price Index of 0.1% was less than expected, which triggered some dollar selling.

“Life is what happens when you’re busy making other plans"
John Lennon
  • FX Rates
    January 14, 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 0.15% on the back of mildly bullish news, and now trades at its highest level in January. Traders await tomorrow’s signing of phase 1 of the US-China trade deal, but then will start to focus on phase 2 - which will be much more challenging to agree upon. Eyes will be on US corporate earnings; the season starts this week.

    GBP

    The pound dropped by 0.2%, its sixth straight day of losses as it is still suffering from yesterday’s dovish comments by a Bank of England official.

    EUR

    The euro fell against the dollar but rose to its highest level against the UK pound since November. Traders are already talking about potential US-EU trade issues when focus on US-China trade wanes.

    CAD

    The loonie is lower by 0.10%, in-line with overall US dollar strength. Oil prices were slightly lower, hitting fresh one-month lows. There are no Canadian economic data releases today that could move markets. Traders await next week’s Bank of Canada meeting where no policy change is expected.

    ASIA/PACIFIC

    Washington dropped the ‘currency manipulator’ label on China, but markets are not reacting since it’s really become simply a political, not a legitimate market-related tool. Interestingly, the Chinese yuan trades near 6.89 per US dollar, nearly the same rate when China was labeled a manipulator last August 5.

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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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