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Dollar higher on virus concerns and strong US labor data
The dollar gained overnight as the focus returned to the spreading coronavirus, and then got a further boost this morning after release of strong US labor data. US equity futures are opening lower as traders take profits ahead of potentially more bad virus news over the weekend. German industrial output shocked on the downside. Presidents Trump and China’s Xi reaffirmed their commitment to implementation of the phase-one trade deal.
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FX Rates
February 7, 2020Rates 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.
EUR/USD 1.0971 GBP/USD 1.2953 USD/CAD 1.3315 AUD/USD 0.6675 USD/JPY 109.5600 USD/CNH 7.0056 USD/ILS 3.4278 USD/MXN 18.7932 USD/CHF 0.9744 USD/INR 71.4012
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USD
US Non-Farm Payroll for January increased by 225,000, exceeding expectations of 165k. The unemployment rate rose to 3.6% from 3.5%, and Wage Growth climbed 3.1% with expectations of 3.0%. The dollar jumped in reaction to the news, building on an overnight rally. The dollar index’s gain stands at about 0.15%, and trades at its highest level since November.
GBPThe UK pound is slightly lower in-line with overall US dollar strength. It remains on its back foot, however, with increasing concern that the UK/EU trade negotiations will be difficult at best, and could easily end in a ‘hard’ Brexit, which may not benefit either side.
EURThe euro was sold on unexpectedly weak German economic data – Industrial Production in December showed its biggest drop in nearly 10 years. This follows yesterday’s release in Germany of unexpectedly weak factory orders. Analysts note this data undermines comments made recently by ECB President Lagarde that eurozone economic growth is stabilizing. The euro is trading below $1.10 and near is lowest levels since last September.
CADThe USD/CAD currency pair is up over 1.33 for the first time since last November. Canada’s upbeat labor data released this morning was largely in line with expectations, but some analysts are highlighting soft productivity in Canada as having a more negative impact on economic growth going forward.
ASIA/PACIFICThe Chinese yuan weakened overnight and trades near 7 per dollar. Traders focus on the spreading coronavirus ahead of the weekend, and the virus’s potential impact on China’s economic growth.
The USD/JPY spiked to 110 following the strong US labor data. However, it quickly traded lower, as uncertainty related to the coronavirus is a tail wind for the Japanese yen as a destination for safe-haven flows.
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