The dollar is stronger as markets react to yesterday’s Fed comments. DXY rose 0.50% to the highest level in a month beating all G-10 peers. Markets are now pricing in five rate hikes for this year as the Fed works to control inflation. Also key data out this morning includes Durable Goods which dropped 0.9% MOM in December (worse than expected), weekly Jobless Claims which dropped to 260K – in line with expectations, and GDP which outperformed.
-
FX Rates
January 27, 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 1.1148 GBP/USD 1.3378 USD/CAD 1.2676 AUD/USD 0.707 USD/JPY 115.46 USD/CNH 6.3693 USD/ILS 3.198 USD/MXN 20.7163 USD/CHF 0.9321 USD/INR 75.0737 USD/BRL 5.3682 USD/SGD 1.3526 USD/DKK 6.6765 USD/SEK 9.3556 USD/NOK 8.9461
-
USDAs expected, Fed Chair Jerome Powell positioned for an interest rate hike in March and clearly stated that policy makers will need to act to help cool inflation. After interest rate hikes begin, the Fed will begin shrinking its balance sheet. Traders now price in five rate hikes this year. Also helping the dollar is strong data including Durable Goods and GDP which showed the economy growing 6.9% in Q4 – well above expectations of 5.3%.GBPThe pound fell close to 1-month lows in reaction to the Fed meeting yesterday. The Bank of England meets next week where a move to tighten monetary policy would shore up lower support.EUR
EUR dropped 0.20% versus the dollar to the lowest levels since June 2020. The move is predicated by sustained dollar strength and dovish comments from ECB policy member Kazimir on inflation.
CADThe Canadian dollar slipped versus a stronger greenback despite rises in oil futures as the BoC kept rates unchanged. Markets price in four rate hikes, with the first in March, for Canada this year.ASIA/PACIFICUSD/JPY continues to climb for a third session amid a flatter treasury curve. Nearby resistance in the upper bound is 115.50 which is the last resistance before highs of 116.35; which was the yen's weakest point since 2017.
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. |
