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Lower dollar in wake of US-China deal, busy schedule today

The dollar is trading broadly lower in the wake of yesterday’s signing of ‘phase one’ of the US-China trade deal. Traders face a busy schedule of events today, including US Retail Sales, Philly Fed Business Outlook, Eurozone New Car Registrations and German CPI. Equities are poised to open higher as US bank Q4 earnings continue to impress. Global bond yields are lower.

“If you cannot do great things, do small things in a great way.”
Napoleon Hill, American author
  • FX Rates
    January 16, 2020

    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 slightly lower across the board in the wake of signing of the ‘phase one’ US-China trade deal. The New Zealand and Australian dollars gained the most against the dollar, the Canadian dollar the least. US Retail Sales for December released this morning rose 0.3%, which showed solid sales for the 2019 holiday shopping season. The Philadelphia Fed Business Outlook for January surprised on the upside, and weekly Initial Jobless Claims were lower than expected. All releases were relatively upbeat, but within expectations.

    GBP

    The UK pound is trading slightly higher, but within a narrow range. The UK economic calendar is light today – the Bank of England’s Bank Liabilities/Credit Conditions Surveys was released, but traders typically take time to analyze and react accordingly. Expectations are rising for a BoE interest rate cut at their month-end meeting, which is keeping the pound under pressure.

    EUR

    The euro is virtually unchanged overnight. German CPI of 1.5% y/o/y was expected and equaled the previous months. Today, the ECB releases minutes from their December meeting and ECB President Lagarde speaks.

    CAD

    The Canadian dollar moved little overnight despite weak oil prices and optimism over the US-China trade deal. Traders are now focusing on the Bank of Canada meeting on January 22 where rates are expected to be left unchanged.

    ASIA/PACIFIC

    The Chinese yuan made further gains following the ‘phase one’ signing yesterday. It reached fresh highs (US dollar lows) at levels last seen in July 2019.

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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

Scott Petruska is Chief Currency Strategist and senior advisor for Silicon Valley Bank’s global financial services group, and is based in Boston, MA. He advises clients on currency and interest rate hedging strategies, and helps them with other aspects of global banking. He regularly writes blogs on topics covering the global financial markets, conducts client seminars and webinars, and speaks at regional financial conferences.

Petruska has more than 30 years experience in the currency and interest rate markets, and has lived and worked in Boston, Chicago, New York City, Singapore and Tokyo. Prior to joining SVB in 2009, he worked at several large international financial institutions, including National Westminster Bank, Irving Trust, Bank of New York, State Street Bank and Commerce Bank. He has been an institutional trader, product developer, analyst, salesperson and advisor.

Petruska has been awarded several professional designations, including the CFA (Chartered Financial Analyst), FRM (Financial Risk Manager) and CMT (Certified Market Technician). He earned his undergraduate degree in Finance & Banking from the University of Wisconsin.

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