Inauguration Day! Markets buoyant, dollar soft
Joe Biden becomes the 46th President of the United States today. Global equities are higher, led by strong earnings from Netflix and Morgan Stanley and by higher Asian bourses. Investors are expecting greater fiscal stimulus with a Biden presidency. The dollar is slightly lower, US 10-year Treasuries are steady at 1.10%, and oil and gold edged higher.
January 20, 2021
EUR/USD 1.2103 GBP/USD 1.3671 USD/CAD 1.2686 AUD/USD 0.7737 USD/JPY 103.7000 USD/CNH 6.4674 USD/ILS 3.2650 USD/MXN 19.5926 USD/CHF 0.8903 USD/INR 73.0263
The dollar is lower and US equities opened higher lifted by strong corporate earnings and expectations of greater stimulus with a Biden presidency. Janet Yellen, soon to be Secretary of the Treasury, said she will focus on helping the unemployed and small businesses, adding that we will take on China’s “abusive” trade and economic policies. She stated that she will not be pushing for a weak dollar to gain competitive advantage, and criticized countries that do so.GBP
The UK pound is stronger for a second day versus the US dollar, and even more so against the euro. The UK reported inflation data for December today, core CPI rose 1.4% compared to 1.3% expected and 1.1% in November.EUR
The euro is lower amid record Covid-19 deaths in Germany. Italy’s government managed to survive a Senate confidence vote yesterday, but Prime Minister Conte did not get an overall majority due to concerns with his leadership in handling the pandemic and economic recession. Traders await tomorrow’s ECB meeting.CAD
The Bank of Canada meets today. Most expectations are for no change in its benchmark rate of 0.25%, but there are some that expect a mini-cut, maybe 10 bps, based on recent Canadian economic weakness, relatively high Covid-19 cases, and comments from BOC Governor Macklem, who suggested that there may be room to ease and still remain over zero.ASIA/PACIFICThe Chinese yuan moved little overnight, amid China’s stock market, which pushed higher overnight. Asian currencies as a group are higher, led by the Singapore dollar and South Korean won. Taiwan saw a 38% jump in December export orders to a record $60 billion.
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.
©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.