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Daily
FX Update

The dollar remains strong as traders await Fed decision and comments

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All eyes are on the US Federal Reserve today as markets expect a 25bp rate cut and will listen for the potential for additional cuts. The BoE and BoJ are due to meet tomorrow and markets are waiting to see if they follow suit. Brexit uncertainty weighed on the pound while a pull back in oil prices did the same for the loonie.

“If you set out to be liked, you would be prepared to compromise on anything at any time, and you would achieve nothing.”
Margaret Thatcher
  • FX Rates
    September 18, 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

    It’s Fed day! The dollar was holding higher in quiet trading ahead of the FOMC decision. Despite relatively strong US data, the Fed is widely expected to cut rates by 0.25% as an insurance policy against slowing global growth, negative fallout from the US-China trade war, and geopolitical uncertainty. The markets will listen closely to Fed Chairman Jerome Powell’s comments beginning today at 2pm EST following the announcement.

    GBP

    GBP slid from one-month highs as UK consumer prices for August grew at their slowest pace in 32 months. Consumer Price Inflation came in at 1.7% versus 2.1% in July and a 1.9% forecast. Brexit uncertainty also dragged on the currency as European Commission President Jean-Claude Juncker cautioned that a no-deal Brexit could be likely. BoJo’s case against the Supreme Court will continue through tomorrow with no set date for the ruling. The BoE is expected to leave rates unchanged tomorrow.

    EUR

    The euro slid slightly this morning on overall USD strength and in anticipation of the Fed decision.

    CAD

    Canadian CPI for August came in at 1.9% versus 2% expected. The USD/CAD pair strengthened slightly but quickly gave back the gains. The pullback in oil prices after Saudi pledged to restore production also weighed on the currency. The pair will look to the FOMC decision for fresh direction.

    ASIA/PACIFIC

    The dollar held strong against the yen – just below a 7-week high in anticipation of the Fed decision and comments today. Since the July rate cut, the dollar has gained nearly 1% on the Japanese currency. After the US Fed announcement, attention will turn to the BoJ, due to release a decision tomorrow about potentially easing policy.

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

Kathryn Garvey is a foreign exchange Associate for Silicon Valley Bank’s global financial services group and has been with SVB since July of 2018. Prior to SVB Kathryn completed co-op internships at Innosight, Market Metrics, and The TJX Companies.

Garvey graduated from Northeastern University in 2018 with a bachelor’s degree in finance, and marketing with elective coursework in entrepreneurship and innovation from Northeastern University.

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