Dollar lower on global equity rebound

A return to risk-on mode fueled a rebound in global equity markets and foreign currencies. Traders reacted positively to a combination of China’s injection of liquidity into its banking system and a reassessment of the scope of the coronavirus. Supporting the optimism was yesterday’s turnaround rally in US equities and last night’s Democratic Party debacle in Iowa, which boosted pro-business Trump’s chances in the November presidential election.

“Human happiness and moral duty are inseparably connected.”
George Washington, elected on Feb 4, 1789 as the first president of the U.S.
  • FX Rates
    February 4, 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 edged lower as a risk-on mood prevailed overnight. Several factors boosted the optimism, from China’s injection of liquidity to last night’s Democratic Party debacle. Currencies which are related to global trade – CAD, AUD, BRL, CNY – performed well, safe-haven currencies – JPY, CHF, and the US dollar -- underperformed.

    GBP

    After an early sell-off, the UK pound rallied after release of UK Construction PMI, which unexpectedly rose to an eight-month high in January.

    EUR

    The euro dipped slightly with a dearth of Eurozone data that would impact markets.

    CAD

    The Canadian dollar made gains from the risk-on sentiment in the markets, and a technical correction from the recent aggressive sell-off in the loonie.

    ASIA/PACIFIC

    A move higher in Chinese equities triggered a rally in equities worldwide. The USDCNY is back below 7 per dollar, the People’s Bank of China setting the CNY rate slightly better than expected.

    The safe-haven Japanese yen weakened by nearly 0.50% , as markets move into risk-on mode.

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Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

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