China markets open much weaker after extended New Year celebrations and virus containment measures.

Chinese equity markets fell 8% after the Chinese New Year holiday was extended to contain the coronavirus. The renminbi fell 1.5% and crossed over the psychologically important 7 figure. The British pound weakened as the first salvos are fired in the negotiations with the European Union on a new trade deal. The US dollar rebounded from Friday loses.

Economic Update for this week:

Monday: Markit France Manufacturing, US ISM Manufacturing, CA Markit Manufacturing

Tuesday: US Durable Goods

Wednesday, US Trade Balance

Thursday: US Jobless Claims

Friday: US Nonfarm Payrolls, CA Unemployment

  • FX Rates
    February 3, 2020

    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 back half its losses from Friday. The greenback strengthened vs. the Chinese renminbi after Chinese authorities announced a $21B injection of liquidity in response to the economic impact of the coronavirus. US markets are watching the Democratic primary in Iowa today for signs a clear leader will emerge to challenge the president and begin to weigh any impact on the economy in the event Trump loses the November election.

    GBP

    The pound sank over 1% vs. the US dollar after the EU took a firm stance in the lead up to negotiations with the UK on future trade. Prime Minister Johnson rejected EU demands setting up difficult talks which must conclude by year-end.

    EUR

    The euro gave back some gains from Friday, but trader sentiment is high for the euro especially vs. the US dollar. Hedge funds and speculators are adding to long euro positions as a way to bet against economic volatility in the US leading into the US presidential election.

    CAD

    Risk appetite improved after China’s overnight liquidity injection. The loonie is holding steady against the greenback but continues to outperform most of its peers. The price of oil stabilized after Friday’s 3% plunge. Canadian Markit manufacturing data is due out this morning and is expected to hold steady.

    ASIA/PACIFIC

    The Chinese renminbi is down half a percent on the day as the coronavirus outbreak has sent the Shanghai & Shenzhen index into free-fall losing 8% in the first day of trading following Lunar New Year celebrations. The central bank in China announced an injection of $21B in liquidity through reverse repurchase agreements. The uncertainty of the potential impact of the virus has led economists to readjust Q1 growth forecasts for China significantly lower.

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