Dollar stronger to begin week; US domestic policy in focus

Dollar stronger to begin week; US domestic policy in focus

The dollar begins the week mildly higher lifted by strong durable goods data and risk sentiment for the US currency. Aussie and CAD outperform vs. the greenback helped by rising commodity prices. The euro didn’t show any major direction following German election. US investors will be laser focused on domestic policy this week, as the House seeks to pass two major spending bills.

This week's economic news:
Monday: US Durable Goods, Dallas Fed Manufacturing
Tuesday: US Consumer Confidence, Wholesale inventories
Wednesday: Mortgage Applications
Thursday: FR and GE CPI, UK Housing
Friday: IT Markit Manufacturing, GE Markit Manufacturing, UK PMI

  • FX Rates
    September 27, 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 modestly higher to begin the week even as rising energy prices and higher global bond yields pressure traditional haven currencies. US durable goods rose 1.7% MoM, beating expectations and supporting the greenback.

    It’s a busy week in the House this week as Pelosi works to pass two packages: the first, a $1T infrastructure bill and the second, a $3.5T spending bill on social safety net, climate change mitigation and education. An inflection point for President Biden’s domestic agenda comes as the government also works to pass a short-term spending bill to avoid a government shutdown Oct 1.  

     

    GBP

    Sterling rose just slightly as UK 5-year inflation rates rise over 4%. BoE Governor Andrew Bailey is expected to speak this week. Traders will listen to his words carefully and will focus on quarter-end activity. Nearby support is just above $1.3600.

    EUR

    The euro fell below $1.1700 as selling pressure is fueled by rising EU bond yields. After 16 years as Chancellor, Angela Merkel did not seek reelection and Olaf Scholz – a Social Democrat - defeated Conservatives in a tight German election. Coalition talks will begin and could last several months. German stocks outperformed this morning on expectations of greater public spending.

    CAD

    A pickup in USD demand helped USD/CAD bounce off 2-week lows. Upside may remain capped, as oil prices continue to rise.

    ASIA/PACIFIC

    JPY selling pressure sends USD/JPY 0.2% higher with YTD highs in sight.

    The Australian dollar gained versus the US dollar helped by rising commodity prices and as fears of a China Evergrande meltdown recede.

     

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.

Kathryn Garvey
WRITTEN BY
Kathryn Garvey

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.

Daily FX Update: Dollar weaker overnight

 

Daily FX Update: Dollar Steady

 

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