Tomorrow’s release of CPI for October will be watched carefully by investors for any sign inflation is accelerating more than expected. The dollar swung to a loss as the US market opened this morning. The Japanese yen strengthened on news Fed Governor Lael Brainard was interviewing with President Biden to replace J. Powell. Brainard is considered somewhat more dovish than Powell.
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November 9, 2021
EUR/USD 1.1588 GBP/USD 1.3541 USD/CAD 1.2473 AUD/USD 0.7382 USD/JPY 112.86 USD/CNH 6.3925 USD/ILS 3.1069 USD/MXN 20.3421 USD/CHF 0.9135 USD/INR 74.0325 USD/BRL 5.4879 USD/SGD 1.3479 USD/DKK 6.4158 USD/SEK 8.5673 USD/NOK 8.5152
The dollar dipped during early trading as investors shift focus away from Friday’s positive jobs report to Wednesday’s inflation readings and who will be the next Federal Reserve Chair. Both Powell and European Central Bank head Lagarde are speaking later today at a conference.
PPI numbers for October +8.6% YoY came in as expected.GBP
Sterling staged a recovery yesterday, bouncing off lows of 1.3450 to trade 1% higher against the dollar and 0.5% against the euro this morning. The consolidation came as investors recalibrate bets on a future rate hike for February. Despite the dovish tone from the Bank of England last week, traders remain positive that the bank will still raise interest rates ahead of the majority of their G-10 peers, notably the Federal Reserve and ECB.EURThe euro is stronger today on overall dollar weakness. ECB President, Christine Lagarde, speaks later today at the ECB Forum on Banking Supervision. No policy remarks are expected, but FX markets will be listening in for any comments on inflation or an increase in tapering.CAD
The Canadian dollar is stronger today on overall dollar weakness and a slight increase in the price of oil. Oil traders are watching for US government response to high oil prices including a release from the strategic reserve.ASIA/PACIFIC
USD/JPY is lower by 0.3% at 113. The yen holds broad gains amid falling global bond yields as Brainard is rumored to be a possible replacement for Powell as head of the Federal Reserve.
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
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