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Daily
FX Update

Political risk takes over from trade talks as markets boost dollar on risk aversion

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The US dollar regained all ground lost yesterday as markets see US impeachment investigation as adding to market uncertainty. The British pound is weaker as political uncertainty takes center stage after Boris Johnson’s suspension of parliament is found to be unlawful leading to calls for his resignation.

“If you could kick the person in the pants responsible for most of your trouble, you would not sit for a month.”

Theodore Roosevelt
  • FX Rates
    September 25, 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 is much stronger this morning compared to yesterday's close.  Financial markets are factoring-in efforts to impeach Trump by Democrats.  Although there is seemingly little chance an actual impeachment will occur at this time, the potential distraction from trade talks leads to uncertainty.
    New home sales for August will be released later this morning.

    GBP

    The British pound has fallen almost 1% since the UK Supreme Court found Boris Johnson’s suspension of parliament to be unlawful. Brexit is still a concern, but the Prime Minister now needs to focus on keeping his job.

    EUR

    The euro bounces around lows from May 2017 as markets continue to evaluate the ECB’s rate cut from earlier this month. Economists are concerned the eurozone has reached the maximum benefit from low rates.

    CAD

    The Canadian dollar weakened slightly on overall dollar weakness and also a steadily weakening oil price. Saudis are reporting oil production is resuming faster than initially expected after terror attacks earlier this month. The oil price has now given back most all its gains since the attack.

    ASIA/PACIFIC

    The Chinese renminbi was set weaker overnight despite a thawing in the US/China trade war.
    The Japanese yen weakened after 5-year bonds traded at -0.40%, an all-time low. This after the head of the Japanese central bank indicated interest rates may need to be cut further. 

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

Peter Compton is a senior foreign exchange advisor for Silicon Valley Bank’s global financial services group, and has been with SVB since 2007. He helps clients design and implement hedging strategies for foreign currency exposures. Compton has over 20 years experience in global financial markets.

Before joining Silicon Valley Bank, Compton spent seven years working in the European equity markets. Based in Germany, he spent four years with HSBC and three years as Head of Equity Sales for ABN-AMRO in Frankfurt. Prior to his work overseas, Compton spent seven years with Bank of America in San Francisco as an equity and fixed income derivative specialist.

Compton holds a bachelor's degree in business and management from the University of Rhode Island and a Master's of Business Administration from San Francisco State University.
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