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FX Update

The dollar continued weakening despite June CPI data coming in above expectations

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Yesterday’s dollar bearishness continued today stemming from Fed Chairman Jerome Powell’s dovish comments. A general “risk-on” sentiment buoyed financial markets which now expect the Fed to cut rates twice for a total of 0.50% over the balance of this year. Oil is stronger as are most commodity prices giving a boost to commodity currencies.

“I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”
Warren Buffet
  • FX Rates
    July 11, 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 dollar weakened overnight despite CPI data for June coming in higher than expected at 2.1%. Yesterday, the greenback sank following Fed Chairman Powell’s hints that they intend to cut rates soon. This in turn boosted wider risk appetite and pushed US stock indices higher with the S&P500 reaching the 3000 level for the first time in history. Powell is set to return for a second day of testimony before the Senate Banking Committee.


    The pound gained on overall dollar weakness for a second day. Mixed data on the health of the UK economy was released on Wednesday with Manufacturing Production numbers in May lower than expected, while Monthly GDP 3M/3M change was 0.3% versus 0.1% expected.


    The euro is up only slightly vs. the US dollar despite eurozone country-specific data coming in better than expected. Overnight brought the release of ECB minutes from the June meeting that showed a strong consensus to ease monetary policy further. Markets are now expecting a further cut in rates and possible increase in asset purchases at the July ECB meeting.


    The Canadian dollar is stronger again today on higher oil prices. A British naval ship escorted a British oil tanker by several Iranian gunships yesterday causing oil to tick higher. Also, a hurricane in the Gulf of Mexico will likely sweep through oil platforms on its way to the Louisiana coast by Monday. Oil production has been halted on half the capacity in the area in preparation.

    The Bank of Canada left rates unchanged yesterday as expected.


    The Japanese yen gained on the US dollar as did most currencies. The yen strength was dampened by a general risk-off sentiment. The Bank of Japan meets on July 30 and market speculation is the central bank will extend its ultra-accommodative monetary policy beyond its current commitment of spring 2020 – limiting gains on the yen.

    The Australian and New Zealand dollars gained on overall dollar weakness and higher commodity prices.

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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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