Equities higher, dollar lower as risk-on continues
The rally in US equities continues as investors feel confident that risky assets can go higher after last Friday’s unexpectedly strong US jobs report. Analysts are increasingly upbeat with their economic growth forecasts as states reopen, New York City beginning Phase One today. The dollar is little changed as are US Treasury yields at 0.90%.
Monday: Eurozone Sentix Investor Confidence
Tuesday: US Small Business Optimism (May), JOLTS Job Openings (Apr), EZ Employment (Q1 2020), GDP (Q1 2020)
Wednesday: US Real Avg Weekly Earnings, CPI (May), FOMC Rate Decision
Thursday: US PPI (May), Initial Jobless Claims (June 6)
Friday: US Import Price Index (May), Export Price Index (May), EU Industrial Production (Apr)
June 8, 2020
EUR/USD 1.1317 GBP/USD 1.2701 USD/CAD 1.3383 AUD/USD 0.6992 USD/JPY 109.0100 USD/CNH 7.0711 USD/ILS 3.4557 USD/MXN 21.5898 USD/CHF 0.9573 USD/INR 75.5437
The dollar is slightly lower across the board, led by the currencies of commodity countries – Norway, Russia, Brazil, and New Zealand and Australia. Several events are pushing commodity prices higher – an OPEC agreement to extend oil production constraints, a record start to the hurricane season in America, the closure of a large iron ore production facility in Brazil due to Covid-19 and the fall of ethanol prices and corn output related to the virus.GBPThe UK pound’s rally this month has stalled, as currency traders refocus their attention on UK/EU trade negotiations. The June deadline approaches for the UK to ask to extend the negotiating period past year-end, something that PM Boris Johnson has said he does not wish to do, but which most analysts believe is necessary to achieve a deal with which both sides will find agreeable.EURThe euro is little changed as traders await ECB President Lagarde comments while attending a European Parliament meeting today and results from the eurozone finance minister meeting on Thursday to discuss the EU stimulus package.CAD
The Canadian dollar edged higher versus the US dollar following upbeat eco stats: consumer sentiment moved higher for the sixth straight week and Housing Starts for May were much better than expected.ASIA/PACIFICAsian currencies edged higher overnight, as investor confidence in risky assets follows from last Friday’s strong US jobs data. Although the Chinese yuan strengthened over the weekend, its value against a basket of partners’ currencies has fallen for a record 16 straight days.
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