Markets await FOMC statement and press conference this afternoon
The dollar index is modestly higher this morning as financial markets await this afternoon’s FOMC meeting results as well as a speech this evening from President Joe Biden on taxes and additional social spending. Commodity currencies continue to do well. The pound is weaker as the Brexit saga officially ends and while Boris Johnston remains under scrutiny for unlawful campaign donations in the form of payments for personal apartment renovations.
April 28, 2021
EUR/USD 1.2066 GBP/USD 1.3886 USD/CAD 1.2394 AUD/USD 0.7746 USD/JPY 108.92 USD/CNH 6.4840 USD/ILS 3.2548 USD/MXN 20.0143 USD/CHF 0.9154 USD/INR 74.365 USD/BRL 5.4109 USD/SGD 1.3262 USD/DKK 6.1625 USD/SEK 8.3807 USD/NOK 8.2583
Financial markets favored the dollar while awaiting today’s FOMC meeting results. The Biden administration released some details regarding a $1.8B 10-year “American Families Plan” which President Biden will talk about tonight during a prime time speech. The 10yr Treasury yield ticked up a few basis points as financial markets digest yet another massive spending initiative from Biden. The 10yr yield is now at 1.63% up from 1.53% and on its 6th consecutive day of gains.GBP
The pound fell vs. the dollar as FX markets await the Fed. Brexit officially ended when European Union lawmakers gave their approval for the trade accord with the UK which was negotiated at the 11th hour last December. The UK has yet to fully implement custom controls between Great Britain and Northern Ireland - a politically sensitive measure inside the UK which is now drawing the ire of the European Commission.EUR
The euro is flat vs. the US dollar this morning after consumer confidence for April in France beat expectations, but the same measure for Germany failed to meet forecasts. European bonds and the euro have both ticked lower ahead of FOMC comments today.CAD
The Canadian dollar strengthened again this morning as commodity currencies continue to lead. The return of global economic growth, especially in the US and China, is expected to lead to large increases in exports for Canada – mainly oil and cars. Also, an acute shortage of lumber in the US, specifically for home building and repair, could be met by increased Canadian imports.ASIA/PACIFIC
The Australian dollar fell slightly against the greenback as weaker than expected inflation data boosted expectations that monetary policy will not return to normal any time soon. The Aussie dollar has mostly traded between 0.76 and 0.78 in 2021.
China’s renminbi is flat vs. the dollar after credit concerns were alleviated when the nation’s largest state-owned bank helped Huarong Asset Management repay bond holders.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory
By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.
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. Please add us to your trusted list of senders, contacts or address book.
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.
©2021 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and 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.