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Daily
FX Update

Dollar stronger as investors look for haven following Saudi Oil attack

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An attack on Saudi Arabian oil production facilities injected volatility and uncertainty into the markets. The dollar remained strong as a safe-havens outperformed, including the Japanese yen and US Treasuries. The FOMC will begin its two-day meeting tomorrow and markets expect an additional 25bp cut. The Bank of England as well as the Bank of Japan are also expected to deliver rate decisions this week.

ECONOMIC DATA

Monday: US Empire Index

Tuesday: German ZEW Survey Expectations

Wednesday: FOMC Rate Decision, UK CPI, Canada CPI, US Housing Starts

Thursday: Bank of England Bank Rate, US Jobless Claims

Friday: EC Consumer Confidence, Canada Retail Sales

  • FX Rates
    September 16, 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 dollar is higher against most G-10 peers. Markets ignored the Empire State index miss and the dollar remained near session highs. President Trump commented that the US is “locked and loaded depending on verification” of who is responsible for the attack on Saudi Arabian oil facilities. Tomorrow begins the 2-day Fed meeting where markets expect US interest rates to be lowered amid slowing global economic growth and muted inflation.

    GBP
    The pound was sold-off in advance of PM Boris Johnson’s meeting with European Commissioner Jean-Paul Juncker in Luxembourg. Johnson planned to reaffirm his commitment for a hard deal by the end of October. He also is expected to reject further extension in defiance of the law passed to block leaving the EU without a deal. Juncker commented that the talks went well whereas Johnson declined to comment. The pound popped slightly on this news.
    EUR

    The euro found itself slightly lower this morning, mostly on US dollar strength. The strength of the dollar pared last week’s euro gains following the ECB meeting.

    CAD

    The Canadian dollar outperformed after a strike on Saudi oil production facilities sent crude oil prices sharply higher. WTI prices are expected to remain high until oil production is stabilized.

    ASIA/PACIFIC

    USD/JPY fell in reaction to Saudi oil attacks as the market moved into risk-off mode, but recovered after Trump released US oil reserves into the marketplace. The Bank of Japan is growing more open to cutting interest rates farther below zero. The decision will be released Thursday.

    Data out of China again showed signs that the economy is slowing. Industrial output expanded just 4.4% - the slowest since 2002. Retail sales also came in below expectations.
Contact Us

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/foreign-exchange

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About the Author

Kathryn Garvey is a foreign exchange Associate for Silicon Valley Bank’s global financial services group and has been with SVB since July of 2018. Prior to SVB Kathryn completed co-op internships at Innosight, Market Metrics, and The TJX Companies.

Garvey graduated from Northeastern University in 2018 with a bachelor’s degree in finance, and marketing with elective coursework in entrepreneurship and innovation from Northeastern University.

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