New stimulus talks in Washington leave markets searching for next trends

New stimulus talks in Washington leave markets searching for next trends

Global investors closed short dollar positions causing a rally in the dollar after news the US Congress will again take up stimulus discussions. At the same time, FX markets are on edge awaiting any news of a UK/EU trade agreement with every headline pushing the pound and euro. The Swiss franc hit its strongest level versus the US dollar since January 2015 as speculators continued to place bets on a weaker dollar.

“It is December, and nobody asked if I was ready.” 

Sarah Kay
  • FX Rates
    December 2, 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

    Yesterday Fed Chair Powell stressed again the importance of fiscal stimulus to support the recovering US economy. FX speculators have been short the dollar most of 2020, but now face concerns vaccines will take well into 2021 before offsetting surging Covid cases. The uncertainty helped the US dollar versus most currencies; however, many FX market practitioners see a continuing weak dollar trend through 2021.


    The British pound sank despite UK regulators approving the Pfizer and BioNTech vaccine. Concerns surrounding the UK/EU trade negotiations will cause the pound to be extremely volatile over the coming days.


    In European trading, the euro hit its strongest level since April 2018 (1.2088) before profit taking took over. A key technical resistance at about the same level caused FX speculators to take profits on the common currency.


    The Canadian dollar is weaker on renewed fears of Covid’s impact on the Canadian economy. The Canadian dollar had performed well on stimulus spending plans by PM Trudeau’s government.


    The Australian dollar is flat after Q3 GDP came in at 3.3% growth versus the 2.5% expected. However, the AUD was held back due to a China-Australia diplomatic spat which has been escalating for months.

    The Chinese renminbi is slightly weaker after Biden said existing tariffs on Chinese goods will remain in place until his administration can review trade with China in detail. The renminbi had been rallying in part on expectations a Biden presidency will be less volatile toward China.

Contact Us

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at
See all of SVB's latest FX information and commentary at

Subscribe to receive the Daily FX Update in your inbox.

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 You can withdraw your consent at any time.

Peter Compton
Peter Compton

Insights from SVB Industry Experts

SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.

Market risk appetite boosts commodity-linked currencies


US dollar reversed two-day decline following broader risk sentiment


Daily FX Update: USD remains under pressure as markets maintain risk appetite


Daily FX Update: Risk-on trading supports commodity-linked currencies


Daily FX Update: Inflation concerns push the USD higher


Dollar gains vs. other safe havens