Get started with SVB

Are you an innovation company or investor seeking banking services to help you move bold ideas forward, fast?

Let's get started

Existing SVB clients

Get quick answers from our support page.

For help with commercial cards
1.866.553.3481
cardservices@svb.com

For other questions contact Client Service:

1.800.774.7390
clientservice@svb.com

Find a location

Technical or site issue?

Emergency Fed 1% cut fails to calm markets

Yesterday, the Federal Reserve cut its benchmark rate by 1% to 0-0.25%, and other major central banks followed suit with assorted significant stimulus measures. Panicky investors responded by dumping global equities and buying US Treasuries, believing that monetary policy has now been exhausted and coordinated fiscal policies among the big nations highly likely. The dollar is higher, along with yen and Swiss franc, as demand increases for safe haven currencies. Prices of oil and other commodities are collapsing, negatively impacting commodity currencies - CAD, AUD, the South African rand and the Norwegian krone.

Economic data:
Monday: Empire State Manufacturing Survey (March)
Tuesday: Retail Sales (February); Job Openings and Labor Turnover (January); NAHB/Wells Fargo Housing Market Index (March)
Thursday: Bank of Japan announces monetary policy decision; US Leading Economic Index (February)
Friday: Existing-home Sales (February)

  • FX Rates
    March 16, 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 Federal Reserve’s emergency interest rate cut and several liquidity provisions did not provide comfort to investors, as the Fed is thought to have now exhausted all its conventional and unconventional tools. The S&P 500 opened limit down 5%, the UST 10-yr yield is down 20 basis points to 0.76%, and the US dollar is slightly higher.

    GBP

    The UK pound fell against all its peer currencies, as the US expanded a travel ban to the UK amid a surge in COVID-19 deaths. Traders were also reacting to a shutdown in Europe to contain the virus. The GBP/USD and EUR/GBP both fell to six-month lows. Pressure is intense on the UK government amid criticism that they have been slow to respond to the virus compared to other European countries. The FTSE equity index is down 8% today and UK Gilt yields have dropped to 0.37%, but are above last week’s low at 0.15%.

    EUR

    The euro has gained slightly against its peers despite most of Europe under lockdown, including Italy, France, Spain, Austria, Norway and Ireland. The World Health Organization announced that Europe has surpassed China as the “epicenter” of the coronavirus pandemic. Most European equity markets are lower in morning trading between 7% and 12%. European bond yields are bouncing off lows seen earlier in the month.

    CAD

    The USD/CAD currency pair is approaching 1.40 amid collapsing oil prices. The last time it was this high was in January 2016, when it spiked and quickly reversed from 1.4579. The Bank of Canada is expected to cut its overnight rate to 0.25% well before the next scheduled meeting on April 15. BOC Governor Poloz has said they are not ready to enact a negative rate policy.

    ASIA/PACIFIC

    The Japanese yen rallied on market fears and is the strongest currency in the world. The Chinese yuan is only slightly weaker as China’s central bank is trying to keep a lid on market volatility by keeping its medium term loan rates steady amid lower rates elsewhere in the world.

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

Subscribe to receive the Daily FX Update in your inbox.

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 privacy@svb.com. You can withdraw your consent at any time.

Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

Insights from SVB Industry Experts

 
SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.
Dollar hits 1-week low following jobs data
 
Dollar mixed, equities to rise at open
 
Dollar slides a second day amid risk-on mood
 
Greenback comes off 1-week high
 
Dollar up despite weak jobs report
 
Dollar steady after massive job cuts
 
Now Let's Get Started
 

See how SVB makes next happen now for entrepreneurs like you.

Connect with Us