Weak US economic data this morning added to the bearish sentiment driving investors into US Treasuries. The US 10yr Treasury peaked yesterday at 3.00% and is currently trading at 2.77%. At the same time, the US dollar weakened overnight and this morning as investors question both US economic growth and therefore the Fed’s future path for interest rates.
“Nothing is like it seems, but everything is exactly like it is.”
-
FX Rates
May 19, 2022Rates 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.
EUR/USD 1.0570 GBP/USD 1.2509 USD/CAD 1.2789 AUD/USD 0.7066 USD/JPY 127.29 USD/CNH 6.7211 USD/ILS 3.3781 USD/MXN 19.9196 USD/CHF 0.9716 USD/INR 77.7263 USD/BRL 4.9165 USD/SGD 1.3806 USD/DKK 7.0415 USD/SEK 9.9271 USD/NOK 9.7144
-
USD
The dollar was weaker overnight and extended losses after the morning’s economic releases. Weekly Initial Jobless claims came in at 218K which is above the 200K expected with prior week revised down to 197. The Philly Fed Business Outlook Index for May came in at 2.6, much less than the estimates of 15 and April's 17.6.
GBPGBP/USD rallied off a two-year low earlier in the week and is now trading over 1.24. Chancellor of the Exchequer, Rishi Sunak, has promised tax cuts for businesses ahead of a sharp increase in headline co-operation tax. He also warned that stimulus to ease the cost-of-living crisis could stoke inflation further.
EURThe euro gained on overall US dollar weakness. ECB minutes from the April meeting revealed little. France's Macron and his allies are projected to retain a majority in next month’s legislative elections. Brussels has warned the UK they must engage with the EU over Northern Ireland, having previously threatened the suspension of the trade agreement should the UK take unilateral action.
CADThe Canadian dollar is flat this morning. Overall US dollar bearishness was offset by a weaker and very volatile oil price. Oil traded over $115/bbl yesterday before the equity sell-off picked up steam over the afternoon. Oil price is about $106/bbl as we write. Oil price was also weakened by news China may buy oil from Russia adding to the overall global supply.
ASIA/PACIFICMost currencies in Asia gain on overall US dollar weakness. The Japanese yen gained for a second day despite Japan’s trade deficit widening to $6.6 billion dollars in April, as a weaker yen drove up the cost of imports.
Asian stocks extended a sell-off on fears of an economic downturn, with investors turning to bonds.
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/foreign-exchange-advisory
| Source: Bloomberg | |
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. |
