.png){kind=logo}
Higher US producer prices fuel weaker dollar, stronger stocks
This morning’s release of PPI for June showed unexpectedly higher produce price inflation, in line with yesterday’s higher CPI data. The dollar is lower across the board, stocks are higher, and bond yields have dropped. Fed Chair Powell begins his semi-annual Monetary Policy Report to Congress at 12pm EST today, and traders expect him to repeat his narrative of waiting for sustainable job growth and that current inflation is transitory. Earlier today, the Reserve Bank of New Zealand said it will step away from its long-term asset purchase program. The Bank of Canada meets today, and it is also expected to further taper its asset purchases.
-
FX Rates
July 14, 2021Rates 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 1.1825 GBP/USD 1.3881 USD/CAD 1.2450 AUD/USD 0.7480 USD/JPY 110.0700 USD/CNH 6.4578 USD/ILS 3.2646 USD/MXN 19.9193 USD/CHF 0.9163 USD/INR 74.5875 USD/BRL 5.0875 USD/SGD 1.3535 USD/DKK 6.2926 USD/SEK 8.6303 USD/NOK 8.7421
-
USD
The dollar is broadly lower against its peers. The unexpectedly high PPI data points to higher costs in the reopening of the economy. Bank earnings released this morning – BOA, Citi, Wells Fargo -- were mixed.
GBPThe UK pound is higher, and in line with others amid a broadly weaker dollar. UK inflation data for June came in at 2.5% YoY, higher than 2.2% expected. Used car prices rising the most on record (+4.4% in June alone) were seen as the biggest factor. Housing prices rose 10% YoY, beating expectations of 9.4%.
EURThe euro is higher by 0.4%, a big rebound from yesterday’s decline below $1.18, it’s lowest level since the first week of April. Industrial Production for the euro area for May fell 1.0%, weaker than expected and lower than April’s revised increase of 0.6%.
CADThe Canadian dollar is up slightly, as traders await this morning’s Bank of Canada decision. The BOC is expected to reduce its weekly purchases by $1B, which follows April’s cut of the same amount. The hawkish move is expected to be tempered by comments of inflation being transitory (a la the Fed) and the need for a “complete recovery” in the labor market.
ASIA/PACIFICThe Chinese yuan moved little overnight as traders await tonight’s release of China’s GDP 2Q, and Retail Sales and Industrial Production for June. Expectations are for weaker numbers than previous periods.
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
Subscribe to receive the Daily FX Update in your inbox.
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.
| Source: Bloomberg | |
This article is intended for U.S. audiences only. ©2021 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 and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. |
