Yesterday afternoon the dollar sold off as equity markets gained and a risk-on sentiment took over. In early morning trading today, the European Central Bank (ECB) released comments as part of a regularly scheduled meeting and press conference. The ECB's comments highlighted the risk to the eurozone economy from the Russian/Ukrainian war and the resulting supply disruptions. The bearish tone sent investors to the sidelines and into the safe haven US dollar.
"Hard work will always bring opportunities."
April 14, 2022
EUR/USD 1.0805 GBP/USD 1.3070 USD/CAD 1.2582 AUD/USD 0.7426 USD/JPY 125.68 USD/CNH 6.3776 USD/ILS 3.2183 USD/MXN 19.9772 USD/CHF 0.9397 USD/INR 76.1837 USD/BRL 4.7266 USD/SGD 1.3581 USD/DKK 6.8946 USD/SEK 9.5404 USD/NOK 8.8081
The dollar gained on risk-off sentiment. US retail sales data came in at +0.5% today - analysts expect a MoM increase of 0.6%, and YoY increase of 11%. Initial Jobless Claims came in at 185K vs. the 171K expected. University of Michigan Consumer Sentiment index for April is due out later this morning.GBP
The pound is slightly weaker versus the US dollar following most major currencies. Risk-off sentiment pushed the dollar higher. Yesterday’s CPI reading for the UK showed March inflation at 7.0% YoY which exceeded the 6.7% expected.EUR
The euro is again trading at one-year lows versus the US dollar. Dire warnings by the ECB sank the euro and risk sentiment to start the US trading day. The ECB repeated intentions to end bond-buying soon as inflation in the eurozone far exceeds the ECB’s 2% target. President Lagarde said a sudden stoppage of energy supplies from Russia would have a significant negative impact on the eurozone economy.CAD
The Canadian dollar is stronger versus the US dollar despite the price of oil sinking in morning trading. Yesterday the Bank of Canada announced a rate increase of 50bps and said bond purchases would stop April 25.ASIA/PACIFIC
The Australian dollar is hanging on to gains versus the US dollar despite missing job gain estimates for March. FX traders expect the Reserve Bank of Australia will be forced to begin significant rate increases like most other central banks.
The PBOC is expected to trim its key policy rate tomorrow for the second time this year.
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
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