Fed comments support dollar, equities trade lower

Central banks controlled the airwaves the previous two days. The US Fed kept interest rates unchanged and signaled that they expect Congress to provide further stimulus to the American economy. The pound fell sharply versus the dollar as the BOE left rates unchanged, but commented that they had begun exploring how to implement negative rates. Bank of Japan also kept rates unchanged. The yen is the largest gainer today with the dollar close behind as markets trade risk-off.

“Perpetual optimism is a force multiplier.” 

Colin Powell
  • FX Rates
    September 17, 2020

    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 strengthened and held on following weak labor and housing data released this morning. Philly Fed index came in at 15.0 matching consensus and Initial Jobless Claims fell short of estimates. Yesterday, the FOMC announced interest rates could stay at zero through 2023 as the central bank tries to spur inflation. Jerome Powell reiterated “the path ahead remains highly uncertain” and stressed the need for further financial stimulus to be approved through Congress.
    GBP

    The pound fell 0.7% versus the dollar and BOE kept rates unchanged but surprised investors by noting that they had begun exploring how negative interest rates may be implemented.

    EUR

    The euro recovered steep earlier losses and is now just 0.1% lower versus the dollar. The pair reached its previous September low near $1.1750 after the greenback gained following comments by the Fed.

    CAD

    The Canadian dollar slipped as the greenback strengthened ahead of data out of the US and Canada. Canada's ADP data showed that employment declined sharply in August, furthering the slide versus the dollar.

    ASIA/PACIFIC

    The Japanese yen continues to extend its rally as markets trade risk-off. The BOJ kept monetary policy unchanged as expected with Governor Kuroda saying “The BOJ will continue with measures that are exerting positive effects on the economy."

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Kathryn Garvey
WRITTEN BY
Kathryn Garvey

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