FX markets saw a surge in the dollar yesterday morning only to give all gains back and close at a loss for the day. Today, the dollar is up as investors await the outcome of the Federal Reserve’s FOMC meeting which begins today and concludes tomorrow with a statement and press conference. The increase in Covid-19 cases due to the delta variant has investors wary of new restrictions and their impact on the US economy.
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July 28, 2021
EUR/USD 1.1789 GBP/USD 1.3848 USD/CAD 1.2600 AUD/USD 0.7327 USD/JPY 110.1700 USD/CNH 6.5069 USD/ILS 3.2655 USD/MXN 19.9477 USD/CHF 0.9166 USD/INR 74.3775 USD/BRL 5.1448 USD/SGD 1.3613 USD/DKK 6.3108 USD/SEK 8.6500 USD/NOK 8.8752
Investors seem concerned about betting against the US dollar ahead of tomorrow’s Fed statement and press conference. Political pressure in the US for the Fed to take action on increasing inflation will test the central banks position that price increases are transitory. The dollar is stronger this morning but holds within longer term ranges.GBP
The pound is slightly weaker this morning vs. the US dollar but has generally held onto yesterday’s late day gains. Another day of falling Covid-19 cases has buoyed GBP. The UK dropped many Covid related restrictions earlier this week and investors will be watching carefully the number of covid cases in the coming weeks for signs of increase and any possible government reaction.EUR
The euro gave back all of yesterday’s late-day surge vs. the US dollar. The common currency is hovering around the 1.18 level with 1.1760 becoming a strong support level. Covid case increases led to euro weakness over the past month but with the US case counts now increasing investors may see the dollar being more negatively impacted.CAD
The Canadian dollar lost ground to the US dollar after Canadian CPI data for June came in at 3.1%, slightly weaker than expected. Many market watchers expect Canada to begin raising interest rates before the United States but, Canada's weaker inflation reading does not support this view.ASIA/PACIFIC
Sydney’s lockdown has been extended by a further four weeks as new Covid cases continue to surge. The state of Victoria lifted its fifth lockdown today. The Australian dollar lost 0.2% against the US dollar during today’s session and the ASX 200 lost 0.7%.
The Chinese renminbi strengthened overnight after yesterday's sell-off which was the weakest performance for the renminbi in 9 months. Speculators seem to be building positions to bet against the renminbi which could reverse quickly.
For more analysis on FX markets or information regarding SVB's FX services:
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