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Daily
FX Update

Brexit opponents attempt to block Parliament suspension; additional tariffs possible on Chinese goods this weekend

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The Chinese look to try and dampen the rhetoric on trade tariffs with the US, but a 15% tariff is due to come in to force this weekend. New UK PM Boris Johnson’s desire to suspend parliament for 5 weeks in the lead up to the Brexit deadline will be looked at by two courts on behalf of Brexit opponents today.

“Summer’s lease hath all too short a date.”
William Shakespeare
  • FX Rates
    August 30, 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 continues it’s slow strengthening, helping the Dow which rose 326 points yesterday. US – China trade tensions remain in focus, with the US Chamber of Commerce urging both sides to withdraw tariffs and return to the negotiating table. A 15% tariff will be imposed on approximately $110B of Chinese imports this weekend. The US yield curve is still inverted with the 10 year yield falling below the 2 year. Some pundits view this as a pre-cursor to a recession.

    GBP

    Boris Johnson’s attempt to suspend parliament will be scrutinized today, with two courts set to rule on challenges from Brexit opponents looking to block prorogation. This could lead to a minimum of a vote of no confidence. Consumer confidence fell to a six-year low for the month of August with a reading of -14.

    Sterling had a relatively uneventful day, closing lower while the FTSE 100 benefited to end the day in the green.

    EUR

    The euro was helped yesterday when Klass Knot said more Central Bank stimulus was not guaranteed. Q2 GDP fell to +0.4% q/q and to 3.6% y/y from 5% from 0.9% in Q1. Today the euro fell close to its lowest level of the month.

    CAD

    The Canadian dollar strengthened after Q2 GDP beat its forecast. WTI oil is also helped as it held above $56 a barrel.

    ASIA/PACIFIC

    The Chinese yuan strengthened its most in two weeks. Other Asian currencies also look very soft due to the trade dispute between the US and China. The Aussie and New Zealand dollars are both losing ground due to the strong US dollar. The South African rand is following suit.

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

Laurence Hayward is the Senior Advisor for International Markets and Risk for Silicon Valley Bank in its Central Region. He is responsible for helping clients mitigate foreign exchange risk, including trade finance and international cash management.

Hayward has over 40 years in the foreign exchange and interest rate markets, with experience as a banker, broker, trader and marketer / advisor. He has worked in London, Abu Dhabi, Dubai, Singapore, Hong Kong, New York, Houston, Dallas, Santa Clara and Denver for Barclays International, First National Bank of Boston, Tullett and Tokyo Forex International, Gulf International Bank, NationsBank, Bank One, Cambridge Mercantile Corp. and Silicon Valley Bank. He has made presentations to the national AFP, the New Orleans AFP, the Houston TMA. Fort Worth Chamber of Commerce, the University of Colorado at Boulder, the KPMG Global Enterprise Institute in Denver, and many bank presentations on the subjects of foreign exchange, international risk, FASB accounting rules and quant analysis. He has also been published in the Wall Street Journal, the New York Times, and many periodicals.
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