The dollar is up as investors take profits after China manufacturing data disappoints and US income data soars

The dollar is up as investors take profits after China manufacturing data disappoints and US income data soars

After gaining 5% in April, the S&P 500 looks set for profit taking as investors close out the month. The dollar, which has been selling off during this risk-on month, has rallied overnight. Investors have plowed money into risk assets and sold the dollar this month on expectations of a strong global economic recovery. Overnight Chinese PMI data for April came in weaker than expected and investors sold equities and bought dollars. Personal income growth hits an all-time high in the US.

“You have to see failure as the beginning and the middle, but never entertain it as an end”

Jessica Herrin
  • FX Rates
    April 30, 2021

    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 is stronger after a week of losses after Chinese manufacturing data missed estimates. Personal Income grew 21% in March as stimulus checks hit individuals' bank accounts. Inflation data came in as expected with the March PCE Core Deflator at 1.8% YoY.

    The University of Michigan Consumer Sentiment index for April will be released later this morning.

    GBP

    The pound sank on overall dollar strength. It seems the pound has dipped as investors prepare for next week’s Bank of England meeting. Market participants are divided over whether policy makers will taper bond purchases or wait until later.

    EUR

    The euro lost ground on overall dollar strength. A Q1 GDP reading for Germany, Italy and Spain showed economic contraction highlighting the persistent effects of Covid lockdowns. By contrast, the US grew by 6.4% in the same period and China grew 18%. Granted these figures are skewed due to prior year pandemic shutdowns.

    CAD

    The Canadian dollar strengthened despite lower than expected Chinese manufacturing data which led to a broad sell-off in equities and other risk assets at month end.

    ASIA/PACIFIC

    Chinese manufacturing PMI slipped to 51.5 missing consensus whilst the non-manufacturing gauge also dropped to 54.9. A reading above 50 represents growth.

    The Japanese yen strengthened on safe haven buying. Japanese markets will be closed Monday through Wednesday next week for the Golden Week holiday.

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/trends-insights/foreign-exchange-advisory

Subscribe to receive the Daily FX Update in your inbox.

By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.

Peter Compton
WRITTEN BY
Peter Compton

Insights from SVB Industry Experts

 
SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.

Market risk appetite boosts commodity-linked currencies

 

US dollar reversed two-day decline following broader risk sentiment

 

Daily FX Update: USD remains under pressure as markets maintain risk appetite

 

Daily FX Update: Risk-on trading supports commodity-linked currencies

 

Daily FX Update: Inflation concerns push the USD higher

 

Dollar gains vs. other safe havens