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Daily
FX Update

Dollar slightly lower, focus is on CB meetings, UK election, China tariffs

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The US dollar index is slightly lower from Friday’s close  as traders are faced with a busy week. The Fed, ECB and Swiss National Bank all meet, and expectations are for no change in their respective benchmark rates. Other CB meetings include Brazil, Turkey, and Russia - all are expected to cut rates. Thursday’s UK election is widely expected to be won by Boris Johnson of the Conservative Party. US tariffs on $156 billion of Chinese imports go into effect on December 15, but are expected to be postponed.

Wednesday: US Consumer Price Index (Nov), FOMC announcement and Fed Chairman Powell press conference
Thursday: US Produce Price Index (Nov), ECB announcement and ECB President Lagarde statement, Swiss National Bank announcement including press conference, Bank of Canada Governor Poloz speaks
Friday: US Retail Sales (Nov)
  • FX Rates
    December 9, 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 moved slightly lower, giving back some of Friday’s gains made after the unexpectedly large Nonfarm Payroll number. The Fed has their last policy meeting of the year this week. No change in rates is expected, and we will get a new ‘dot plot’, policy statement, economic projections and a press conference.

    GBP

    The UK is set for a general election on Thursday. Boris Johnson is expected to retain power for the next four years, and guide the UK’s departure from the EU. He is looking to regain his majority in the 650-seat Parliament to push through his Withdrawal Agreement due on January 31, and then his trade deal with the EU by year-end. Nervous traders managed to push the UK pound higher this morning, but then it gave back most of those gains, and it now trades near Friday’s close around $1.3150.

    EUR
    The European Central Bank meets on Thursday. Traders will scrutinize President Christine Lagarde's first official statement for clues of her long-term approach to monetary policy. The euro rallied this morning, but remains under $1.1100.
    CAD

    The Canadian dollar is unchanged from Friday’s close, as traders await this week’s big events. On Thursday, Bank of Canada Governor Stephen Poloz speaks, and traders expect an upbeat assessment of Canada’s economic growth. According to the latest CFTC report, large currency speculators are positioned long the loonie.

    ASIA/PACIFIC

    The dollar firmed against the Chinese yuan, as the December 15 US-China trade deal deadline looms large. Tariffs are scheduled to go into effect if no deal is reached, although an extension by Trump is expected.

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 fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/foreign-exchange

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About the Author

Scott Petruska is Chief Currency Strategist and senior advisor for Silicon Valley Bank’s global financial services group, and is based in Boston, MA. He advises clients on currency and interest rate hedging strategies, and helps them with other aspects of global banking. He regularly writes blogs on topics covering the global financial markets, conducts client seminars and webinars, and speaks at regional financial conferences.

Petruska has more than 30 years experience in the currency and interest rate markets, and has lived and worked in Boston, Chicago, New York City, Singapore and Tokyo. Prior to joining SVB in 2009, he worked at several large international financial institutions, including National Westminster Bank, Irving Trust, Bank of New York, State Street Bank and Commerce Bank. He has been an institutional trader, product developer, analyst, salesperson and advisor.

Petruska has been awarded several professional designations, including the CFA (Chartered Financial Analyst), FRM (Financial Risk Manager) and CMT (Certified Market Technician). He earned his undergraduate degree in Finance & Banking from the University of Wisconsin.

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