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Daily
FX Update

The dollar is strong today; Boris Johnson’s request to suspend parliament sinks the pound

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The USD and the pound are having a good day at the expense of the minor currencies. The yuan weakening to above 7 is putting pressure on emerging market currencies. The pound took a dive this morning after PM Johnson asked the Queen to suspend parliament next month, thus increasing the odds of a potential no-deal Brexit.

"We could never learn to be brave and patient, if there were only joy in the world."
Helen Keller
  • FX Rates
    August 28, 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 strengthened today. Ex former Fed President William Dudley said the Central Bank should reconsider its apolitical approach. FOMC members Daly and Barkin are scheduled to speak today.  The yield curve inverted yesterday with the 2 year higher than the 10 year. This is traditionally viewed as a pre-cursor to a recession.

    GBP

    Boris Johnson has asked the Queen to suspend parliament to avoid a confrontation over a no deal Brexit. The opposition parties met to talk about trying to set up a legal barrier to a no-deal Brexit when parliament starts its new session next week. After strengthening to its strongest level since the beginning of August yesterday, the pound dipped on Boris Johnson’s comments.

    EUR

    ECB Vice President de Guidos said the ECB should take market expectations “with a pinch of salt”. Saying the “ECB’s monetary policy is data dependent, not market dependent”. The euro is weaker.

    CAD

    The Canadian dollar strengthened as WTI oil climbed after falling yesterday.

    ASIA/PACIFIC

    China introduced a number of measures to try and increase consumer spending and called for exporters to move their focus to producing products they can sell in their domestic market. The yuan weakened. The confusion over trade talks with China continues after Trump comments.

    Reserve Bank of Australia deputy Governor Guy Debelle said the weakening Aussie dollar was helping the economy and that further falls would be beneficial.

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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