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Daily
FX Update

Hopes of a US/China trade deal helped the dollar while other safe-haven currencies sell-off

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The dollar is up today mostly vs. the euro which sold off largely due to technical factors. The Chinese renminbi is up strongly after the central bank there stepped in to help with liquidity in support of a recently weak bond market. Trade currencies like the Australian dollar are stronger today, as are currencies with higher yield such as the Indian rupee.

“The best time to make friends is before you need them”
Ethel Barrymore
  • FX Rates
    November 5, 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 gained this morning as the euro sold off and safe-haven currencies (Japanese yen and Swiss franc) lost ground. The US China trade negotiations continue with reports emerging that the Chinese are pressing President Trump to remove more tariffs ahead of a deal signing. US Services and Composite PMI data is released later this morning.

    GBP

    The pound is flat relative to the US dollar after losing ground late yesterday. UK Services and Composite PMI data for October was better than expectations with a reading of 50 which also beat September’s reading. Political parties grapple for position in front of the December 12 general election. With a hard Brexit mostly off the table, financial markets focus on the formation of a consensus in the UK parliament thus allowing a final resolution to Brexit.

    EUR

    The euro is down 0.7% since yesterday afternoon mostly on technical trading in the FX markets. Recent bullish positions in the euro are being replaced with euro selling as the carry trade favors higher-yielding currencies. Christine Lagarde, the new ECB president, steered clear of any comments on monetary policy in her first speech in the role. However, she has called for the EU to “not allow self-doubt to drag us down” and for “strength, resolve and courage”.

    CAD

    The Canadian dollar is stronger this morning mostly on another increase in the price of oil which is now up over 8% since early October. Trade data for Canada came in a bit worse than expected but better than the prior month reading.

    ASIA/PACIFIC

    The Chinese renminbi (offshore CNH) strengthened from 7.03 to 6.99 as the People’s Bank of China injected funds to support the domestic bond market which has shown recent significant weakness.  The central bank move combined with increasing optimism about a trade agreement lead to a gain in the renminbi and other trade currencies like the Australian dollar.
    The Japanese yen weakened as safe-haven currencies sold off.

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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