Strong US economic data could not save dollar as selling pressure picks up speed vs CAD, GBP and EUR

Strong US economic data could not save dollar as selling pressure picks up speed vs CAD, GBP and EUR

Despite caution this morning in equity and bond markets, the US dollar remains under pressure as does fellow safe haven currencies – the Swiss franc and Japanese yen. The US 10-yr Treasury yield again set a one-year high of 1.45% up from 1.08% to start the month. The higher yield is bringing in global investors who believe the increase is not a prelude to higher inflation. By comparison, the euro denominated German 10-yr bond has a negative yield and the British bond yields 0.81%.

“Courage is grace under pressure.”

Ernest Hemingway
  • FX Rates
    February 25, 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.


  • USD

    Strong Durable Goods for January as well as better than expected weekly initial jobless claims could not rescue the declining dollar especially vs. the euro, pound and Canadian dollar. Financial markets will continue to watch stimulus talks in Congress and gauge the impact on the 10-yr Treasury bond.

    GBP

    The British pound heads toward a 6th consecutive day of gains vs. the US dollar on optimism the UK will successfully vaccinate enough citizens to stick to a June date to remove all lockdown restrictions and fully reopen the economy.

    EUR

    Mixed economic data from the eurozone could not stop the common currency from gaining vs. the US dollar. FX market watchers’ site technical trading levels around 1.218, suggesting once the level is given the euro will rise to 1.2348.

    CAD

    The Canadian dollar hit its strongest level vs. USD in over 3 years on the strength of gains in oil prices. An OPEC meeting next week will be watched carefully regarding possible changes in oil production, especially from Russia and Saudi Arabia, with any announcement of a large increase in production likely to sink the price of oil.

    ASIA/PACIFIC

    The Australian dollar hit a 3-year high vs. the US dollar as the commodity-linked rally continues.

    The Japanese yen was weaker again today as the 10-yr US Treasury bond yield hit 1-year highs, attracting investment from Asian investors who buy dollars to buy the Treasuries.

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Peter Compton
WRITTEN BY
Peter Compton

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