FX Update

FOMC anticipation puts dollar in neutral

The Bloomberg Dollar Index is in wait-and-see mode prior to the FOMC’s rate announcement/guidance this afternoon. US-China trade negotiations remain static after US Trade Representative Lighthizer’s visit to Shanghai Tuesday concluded with no firm results. Markets weigh higher odds of a no-deal Brexit as PM Johnson continues to tighten his stance on a no-deal Brexit.

“Seeing comes before words.”

John Berger
  • FX Rates
    July 31, 2019

    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 is due to announce its latest policy decision today with the market expecting the central bank to cut interest rates by a minimum of 25 basis points, the first rate cut since 2008. Attention will then turn to comments from Fed Chair Jerome Powell, which will set the tone for expected future monetary policy.

    Trump tweeted on Tuesday that if he wins re-election in November 2020, he could harden his stance on current trade disputes, sparking risk-off appetite across markets.

    The dollar index is mostly unchanged as investors remain in wait-and-see mode.

    Boris Johnson arrived in Northern Ireland as part of a 3-day UK tour. Brexit and the Irish backstop agreement are expected to be the key focus for discussion today. The Irish border has been one of the main sticking points in negotiations.

    Sterling earns support this morning, but remains under pressure as fears of a no-deal Brexit from the EU continue to grow.

    The euro fell 0.1% against the dollar after eurozone GDP data showed signs of weakness. Last week’s 25-month low of 1.1101 remains in scope with the currency breaking below 1.1150 earlier this morning.

    The loonie is on pace for its third consecutive session of gains after May GDP numbers showed better than expected results. The currency receives a boost from a proposed plan by the Trump administration to import prescription drugs from Canada.


    The Japanese yen receives a boost after US-China trade negotiations ended yesterday with no material outcome.

    The Australian dollar lead gains early in today's session on the back of strong CPI data.

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