The US dollar gave back some of Friday’s gains as positive trade sentiment lifts stocks
Peter Compton " | December 16, 2019
FX markets are selling long dollar positions as optimism on global trade deals leads to risk-on trading. US economic data this week may be overshadowed by traders' positioning for year-end.
Monday: PMI for December
Tuesday: Housing Starts for November, Industrial Production for November
Thursday: Philly Fed survey for December, Existing Home Sales for November
Friday: Q3 GDP, PCE for November, Univ. of Michigan Consumer Confidence survey for Dec.
December 16, 2019
EUR/USD 1.1149 GBP/USD 1.3343 USD/CAD 1.3127 AUD/USD 0.6895 USD/JPY 109.46 USD/CNH 6.9938 USD/ILS 3.4923 USD/MXN 18.9871 USD/CHF 0.9825 USD/INR 71.0062
The dollar gave back much of last Friday's gains after a general risk-on sentiment led to sales of long US dollar speculative positions. Treasury Secretary Mnuchin said that when Iran is ready, the US will look to take sanctions off the table. US manufacturing, services and composite PMI data is released later this morning.GBP
The British pound is flat vs. the US dollar after touching a high of 1.34 earlier in London trading. Manufacturing and services PMI data for December came in worse than expected. PM Johnson will appoint new ministers to his cabinet today following the Conservatives' biggest win since Margaret Thatcher took office. The government will not grant a second referendum on Brexit and the intention is to bring the Brexit withdrawal bill back to Parliament before Christmas.EUR
The euro is stronger again today and has gained 1.2% this month despite weaker than expected French manufacturing data for December. French President Macron, notwithstanding nationwide protests, has reaffirmed his support for reforming France's pension system. A potential trade war between Germany and China seems a possibility after the Chinese ambassador to Germany threatened Berlin with retaliation if it excludes Huawei as a supplier of telecoms equipment.CAD
The Canadian dollar strengthened significantly vs. the US dollar on positive sentiment for trade. A general risk-on trading day and steady oil and gold prices are helping the loonie to a six-week high.ASIA/PACIFIC
The Japanese yen is weaker for the third day in a row on positive sentiment for global trade.
The Indian rupee sold-off after hitting the strongest level vs. the US dollar since September. FX traders are expecting less rupee buying as the end of year approaches.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory