Dollar lower amid risk-on trading; US Retail Sales beat

Equity markets are risk-on to end the week putting pressure on the dollar, which slipped versus many G-10 peers. The euro and pound are both stronger today but ending the week lower on Brexit trade tensions and coronavirus fears. Retail sales data crushed expectations showing a strong increase in month over month retail spending.

“In the middle of difficulty lies opportunity.”

Albert Einstein

FX Rates
October 16, 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.

EUR/USD 1.1734
GBP/USD 1.2911
USD/CAD 1.3213
AUD/USD 0.7076
USD/JPY 105.31
USD/CNH 6.6940
USD/ILS 3.3796
USD/MXN 20.23
USD/CHF 0.9134
USD/INR 73.35
USD
The dollar slid to end the week buoyed by positive corporate news bolstering risk appetite on hopes for a slimmed down stimulus agreement next week. Retail sales printed a 1.9% m/m increase versus a +0.8% expectation. University of Michigan consumer sentiment is due to be released at 10AM.
GBP
The pound, while stronger today is on pace for a 1% drop to close the week. PM Johnson seems to have decided to walk away from trade talks with the EU following the region’s leaders standing still in negotiations through the summit in Brussels. There is still a small chance of a trade agreement before the December 31 deadline but little time to implement.
EUR
The euro climbed back slightly as the dollar slipped but is set to end the week 0.7% lower. Strict social distancing measures and second-wave fears keep pressure on the common currency.
CAD
Improved risk sentiment sent the loonie higher versus the dollar and will end the week stronger versus the US currency. Macro risk sentiment seems to be the primary influence dictating the Canadian dollar’s direction.
ASIA/PACIFIC
USD/JPY rebounded from an intraday dip to nearly the 105 psychological level following US retail sales figures. Risk-on sentiment in US equity markets reduced demand for safe haven assets.

The yuan erased this week’s losses and strengthened to the highest level since April 2019. PBOC fixing rates seem to support the stronger yuan.

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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/trends-insights/foreign-exchange-advisory

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