Dollar on back foot amid GA runoff election and stronger China fix

Despite risk-off trading in equities and higher volatility, the dollar dropped and commodity linked currencies outperformed. The pound, while still higher than the greenback, unperformed other G-10 gainers as the UK re-entered a lockdown expected to last till mid-February. China’s central bank lifted the fix for the yuan to the highest level in 30 months, boosting demand for riskier currencies.

"We will open the book. Its pages are blank. We are going to put words on them ourselves. The book is called opportunity and its first chapter is New Year's Day."

Edith Lovejoy Pierce, Poet

FX Rates
January 5, 2021

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 1.2270
GBP/USD 1.3576
USD/CAD 1.2752
AUD/USD 0.7703
USD/JPY 102.85
USD/CNH 6.4427
USD/ILS 3.2057
USD/MXN 20.0402
USD/CHF 0.8799
USD/INR 73.18
USD
The dollar fell against all G-10 peers as investors watch Georgia residents cast ballots in a runoff election to decide which party will hold the Senate majority. A democratic control of the Senate would be an indication of looser fiscal and monetary to come and may have negative implications for US treasuries and the US dollar.
GBP
PM Johnson announced a nationwide lockdown yesterday that is expected to last through mid-February. The pound gained only slightly versus the greenback. 4.6B pounds of new support for businesses closed to the lockdown was rolled out.
EUR
The euro gained versus the greenback again and trades below the two-year high set Dec 30. Germany has announced a three week extension for the current coronavirus lockdown as the country and EU member states struggle to deploy the vaccine as quickly as expected.
CAD
After losing ground late in the session yesterday, the Canadian dollar is stronger versus the greenback as commodities advance. WTI oil ticked up 1.5% as an OPEC+ meeting was suspended after a disagreement about a planned February production cut. The meeting is expected to continue today.
ASIA/PACIFIC
USD/JPY fell as low as March 2020 supports as the dollar broadly lost ground. Riskier currencies such as the Aussie and New Zealand dollars gained ground as commodities rose globally.

China’s central bank lifted the yuan fix by the largest amount to the highest level in 30 months. The offshore yuan strengthened versus the greenback and the fix provided a boost to riskier currencies.

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