Traders are starting September in a risk-on mood, fueled by the belief that central banks will continue to provide stimulus to deal with an expanding pandemic and to support economic recovery. US equities opened up following higher Asian equities, led by China, Singapore, and Japan - each country’s index gaining over 1%, and European equities led by France’s CAC 40 index which gained 1.4%. The dollar is lower following this morning’s weak employment data and ahead of data to be released over the remainder of the week. Oil prices are soft ahead of an OPEC+ meeting today to discuss increasing output levels.
September 1, 2021
EUR/USD 1.1846 GBP/USD 1.3792 USD/CAD 1.2598 AUD/USD 0.7361 USD/JPY 109.93 USD/CNH 6.4531 USD/ILS 3.2035 USD/MXN 19.9639 USD/CHF 0.9150 USD/INR 73.0875 USD/BRL 5.1540 USD/SGD 1.3448 USD/DKK 6.2777 USD/SEK 8.6115 USD/NOK 8.6690
The dollar index is lower following an ADP Research Institute report that showed that Business Payrolls rose less than expected, indicating that companies are still struggling to fill vacant positions. The risk-on market mood led high-beta currencies – AUD, MXN, RUB - higher, and the safe-havens JPY and Swiss franc lower.GBP
The UK pound remains steady despite better-than-expected Nationwide House Price Index and Manufacturing PMI for August. Traders are starting to take into account Brexit-related political risk associated with the end of the grace period at month-end September for the Northern Ireland-UK trade check issue.EUR
The euro is little changed overnight, as traders digest EZ’s high inflation figures and yesterday’s hawkish ECB comments in light of an underlying uber-dovish monetary policy. Eurozone Manufacturing PMI for August and Unemployment for July both came in as expected. Traders are focused on more key economic data this week, including PPI, PMI and retails sales.CAD
The Canadian dollar is up slightly on the back of the risk-on market mood, which is fueling a broadly weaker dollar, and despite soft oil prices. Canada’s federal elections on September 20 may see PM Trudeau’s Liberal party challenged by the Conservative party (the party with the most votes forms the government, and its leader becomes the Prime Minister).ASIA/PACIFIC
The JPY is lower for the third day amid the risk-on mood in the markets but still hovers around the 110 level.
CNY is weaker following yesterday’s worse-than-expected China Mfg PMI data for August.
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.
©2022 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, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.