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FX Update

FOMC rate decision on Wednesday and jobs data on Friday weigh on dollar

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The Federal Reserve is widely expected to cut interest rates this Wednesday and jobs data is expected to be weak (85K). But the main driver of US dollar weakness this morning is general risk-on sentiment as equities point toward record highs.

Data for this week:

Tuesday: S&P House Price data for August and Pending Home Sales for September

Wednesday: Q3 GDP, FOMC rate decision

Friday: Nonfarm Payrolls for October, Wage data and ISM for October

  • FX Rates
    October 28, 2019

    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 US dollar has lost 1.6% vs. a basket of currencies since the start of the month. The weakness will very likely continue this week with the Fed expected to cut rates and jobs data to be negatively impacted by the General Motors strike. Risk sentiment has been positive in October as the US and China seem to be moving toward a resolution to the trade war and a hard Brexit looks much less likely.


    The British pound is up slightly vs. the US dollar in volatile trading.  The European Union has granted the UK a Brexit extension until January 31. Prime Minister Boris Johnson is expected to press the UK parliament today for a vote on an early election. The chances of a hard Brexit have diminished significantly over this month with the pound up 5% vs. the US dollar.


    The euro is slightly stronger today on general US dollar weakness.  The European Central Bank says goodbye today to Mario Draghi who steps down as President being replaced by Christine Lagarde. Draghi served for 8 years and is credited with saving the euro during the European debt crises of 2012 when he vowed to do “whatever it takes” and stating the euro was “irreversible”. 


    The Canadian dollar is slightly weaker today as oil prices dip. This Wednesday, the Bank of Canada  is expected to keep rates on hold.  Should the US Federal Reserve cut rates on Wednesday, as expected, the benchmark rate for both countries will be 1.75%, providing lift to the loonie as rates in the US are expected to be cut further in December and/or 2020.


    The Japanese yen lost ground, as most safe-haven currencies and assets gave in to today’s risk-on sentiment. Earnings season has generally been positive in the US and trade war tensions have calmed.

    The Australian dollar is flat this morning as FX traders await clarity from the FOMC and other economic data expected later this week.

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For more analysis on FX markets or information regarding SVB's FX services:

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About the Author

Peter Compton is a senior foreign exchange advisor for Silicon Valley Bank’s global financial services group, and has been with SVB since 2007. He helps clients design and implement hedging strategies for foreign currency exposures. Compton has over 20 years experience in global financial markets.

Before joining Silicon Valley Bank, Compton spent seven years working in the European equity markets. Based in Germany, he spent four years with HSBC and three years as Head of Equity Sales for ABN-AMRO in Frankfurt. Prior to his work overseas, Compton spent seven years with Bank of America in San Francisco as an equity and fixed income derivative specialist.

Compton holds a bachelor's degree in business and management from the University of Rhode Island and a Master's of Business Administration from San Francisco State University.
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