US dollar tests key support levels as optimism overcomes inflation concerns
The dollar is weaker with the Bloomberg dollar index (BBDXY) hovering just above the lows of January and the lows of 2018. A fall below these crucial levels could see the dollar accelerate declines. Much of the European continent is closed today for Whit Monday. Commodity currencies such as the Canadian dollar continue to do well on strong demand outlook as the global economy grows following the pandemic.
Economic Data for this Week:
Tuesday: New Home Sales for April; Conference Board Consumer Confidence for May
Thursday: Durable Goods orders for April, Weekly Jobless Claims
Friday: PCE Deflator for April, Wholesale and Retail Inventories for April, Univ. of Mich. Sentiment for May
May 24, 2021
EUR/USD 1.2225 GBP/USD 1.4167 USD/CAD 1.2051 AUD/USD 0.7751 USD/JPY 108.79 USD/CNH 6.4173 USD/ILS 3.2529 USD/MXN 19.8922 USD/CHF 0.8961 USD/INR 72.9725 USD/BRL 5.3227 USD/SGD 1.3286 USD/DKK 6.0839 USD/SEK 8.3221 USD/NOK 8.3463
The dollar is weaker to start this last week of May after Republicans rejected President Biden’s proposed infrastructure package over the weekend. Biden had lowered the spending from $2.25T to $1.7T in part to gain some bi-partisan support.GBP
The pound is stronger this morning on overall dollar weakness and after the Confederation of British Industry (CBI) proposed a GBP 700B economic plan for the government to incentivize innovation and investment.EUR
The euro is stronger this morning on overall dollar weakness with most of continental Europe on holiday today. With no economic activity, the euro rebounded from losses late last week as investors turned optimistic after Markit Composite PMI for the eurozone beat expectations.CAD
The Canadian dollar is stronger this morning on an increase in the price of oil. FX and oil traders see the supply and demand of oil steadily increasing to meet great economic activity as pandemic related restrictions loosen around the world. The loonie is trading at its strongest levels since 2015.ASIA/PACIFIC
Chinese renminbi is stronger overnight after comments by China’s central bank stressing the currency will be stable despite increasing inflationary pressures. China authorities warned industrial metals producers in the country to refrain from price gouging.
The Australian dollar was left out of a commodity currency rally as China’s warning on metals prices hit the price of iron ore.
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
By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.
Thank you for subscribing to SVB's Daily FX Update.
You're almost done. Please check your email box and follow the instructions to confirm your subscription. If you did not receive an email please check your Spam or Bulk E-Mail folder just in case the confirmation email got delivered there instead of your inbox. If so, select the confirmation message and mark it Not Spam, which should allow future messages to get through. Please add us to your trusted list of senders, contacts or address book.
Please note that we will continue to send you communications that we need to send you (for example, to keep you updated on operational changes to your account, a product or a service) or that we are required to send you by law.
This article is intended for U.S. audiences only.
©2021 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.