Daily
FX Update

Trade talk optimism and positive comments on Brexit weaken the dollar

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The US dollar sank yesterday and again this morning, as did all safe-haven assets, on hopes that the ongoing US/China trade talks in Washington will lead to a deal. Positive comments from politicians on a possible Brexit solution led to the biggest two-day rally in the pound in almost 10 years.

“The great aim of education is not knowledge but action.”
Herbert Spencer
  • FX Rates
    October 11, 2019

    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

    The dollar sold off yesterday and again today on US/China trade talk optimism. President Trump stated the trade talks between US Trade Representative Lighthizer, Treasury Secretary Mnuchin, and Chinese Vice Premier Liu He went very well and that he will meet with the negotiators today.

    GBP

    UK PM Johnson and Irish PM Varadkar held constructive talks yesterday with Varadkar stating, “I do see a pathway towards an agreement in the coming weeks”. Additional positive comments this morning saw GBP strengthen over 3% vs. the US dollar since yesterday morning.

    EUR

    The euro is stronger this morning vs. the US dollar as German inflation data came in as expected. The euro benefits from positive Brexit news and the overall risk-on sentiment in today’s global markets.

    CAD

    The Canadian dollar is much stronger this morning on jobs data for September that came in much higher than expected. Oil is also higher for a second day after bottoming out earlier this week.

    ASIA/PACIFIC

    The Japanese yen heads toward its weakest levels since July as safe-haven assets are sold.
    China’s currency is up 0.6% for the week as markets await firm news on trade negotiations with the US. A so-called “currency pact” with the US could see the renminbi stabilize over the short term. Trump is the wildcard - if he does not hear what he likes on trade negotiations, he will walk away thus allowing an increase in tariffs as previously announced.

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Peter Compton
WRITTEN BY
Peter Compton

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