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Daily
FX Update

Dollar weaker on trade hopes and UK parliament is back

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The dollar sold-off and the British pound jumped as risk-on permeated the world financial markets. China provided waivers to a few US farmers allowing Secretary Munchin to agree to talks on October 7. The UK court found Boris Johnson’s suspension of the UK parliament illegal, further boosting the pound. 

“Wisdom lies neither in fixity nor in change, but in the dialectic between the two
Octavio Paz
  • FX Rates
    September 24, 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 is weaker today as risk-on sentiment sees global investors move back into equities, emerging markets and other risky assets. A combination of seemingly positive developments in the US/China trade war, odds of hard Brexit next month falling, and a new direction in the West’s reaction to Iran’s attack on the Saudi oil refinery all led to the purchases of risky assets. House price data and Consumer Confidence readings due later this morning.

    GBP

    The pound is stronger today against almost every currency as parliament is to return after court rules Johnson’s suspension illegal. Markets see the move as assurance against a hard Brexit on the Oct 31 deadline. Johnson is now in the unenviable position of having to negotiate for a better Brexit deal – something that drove his predecessor into retirement. Johnson’s brash approach may be just what is needed to push all sides to consider their steadfast positions regarding the Irish border.

    EUR

    The euro is stronger today on overall US dollar weakness. Economic data continues to come in mixed at best as business sentiment grows in France and sinks in Germany.

    CAD

    The Canadian dollar strengthened on hopes of a thawing in the global trade war. This despite oil dropping 1% as Saudi supply returns and Europe joins the US in blaming Iran for the attack. It appears the West will pressure Iran for a more stringent nuclear deal, providing relief from the possibility that the US was on the brink of launching an attack on Tehran.

    ASIA/PACIFIC

    The Japanese yen weakened due to risk-on market sentiment. Also, the Bank of Japan head, Kuroda, said cutting negative rates and buying more bonds is on the table.
    The Australian dollar strengthened relative to the US dollar on overall dollar weakness. The head of the RBA indicated a rate cut to 0.75% on October 1 may be necessary – in part to keep the A-dollar from appreciating relative to regional peers.

Contact Us

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

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/foreign-exchange

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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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