Financial markets look to release of Fed minutes and Powell’s speech on Friday
Peter Compton | August 20, 2019
The US dollar again touched year-to-date highs vs. a basket of currencies in overnight trading while some investors sought haven investments like US Treasuries, the Japanese yen and the Swiss franc. Tomorrow’s release of last month's Fed meeting will be scrutinized for indications on the potential magnitude and timing of the Fed’s next rate cut. Friday, Fed Chair Powell will speak at the annual Jackson Hole meeting of central bankers.
“If you tell the truth, you don't have to remember anything.”Mark Twain
August 20, 2019
EUR/USD 1.1071 GBP/USD 1.2088 USD/CAD 1.3336 AUD/USD 0.6775 USD/JPY 106.28 USD/CNH 7.0725 USD/ILS 3.5297 USD/MXN 19.7948 USD/CHF 0.9804 USD/INR 71.7100
A lack of economic data and the upcoming Fed comments left market participants on the sideline as the US dollar remains near highs for the year. Trump is headed to France this weekend for the annual G7 meeting with the markets awaiting any comments on trade between the EU and US.GBP
The pound drifted lower as FX markets watched UK officials banter about the Irish backstop. UK Parliament returns September 3rd with little progress on Brexit negotiations expected, leaving political measures in the UK as the markets' last hope for a soft Brexit, an extension to Article 50 or a second referendum.EUR
The euro remains near one-year lows as FX traders focus on the Fed, a possible German recession, and a growing political storm in Italy. The G7 meeting in France this weekend is not scheduled to specifically discuss trade, but will likely produce sound bites that are anticipated to be negative for markets.CAD
Canadian data on manufacturing sales came in less negative than expected, but the loonie lost vs. the US dollar as FX traders focused on upcoming Fed comments. The oil price was flat as commodities in general continue to remain at recent lows.ASIA/PACIFIC
The Aussie dollar remains near 10-year lows after minutes from the Reserve Bank of Australia’s August meeting suggested the central bank was not in a hurry to cut rates again.
China lowered its lending reference rate in the first publication of a new benchmark since new interest rate reforms were announced on Saturday.
The Japanese yen gained on safe haven buying in front of Fed minutes tomorrow and Powell’s speech on Friday.
For more analysis on FX markets or information regarding SVB's FX services:
Thank you for subscribing to SVB's Daily FX Update.
You’re almost done. Please check your email box and follow the instructions to confirm your subscription. If you did not receive an email please check your Spam or Bulk E-Mail folder just in case the confirmation email got delivered there instead of your inbox. If so, select the confirmation message and mark it Not Spam, which should allow future messages to get through. We also suggest you whitelist the svb.com domain.
Please note that we will continue to send you communications that we need to send you (for example, to keep you updated on operational changes to your account, a product or a service) or that we are required to send you by law.
This article is intended for U.S. audiences only.
©2019 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.