A rally in Treasuries and bond prices elsewhere is soothing nerves in financial markets, leading to a modest risk-on mood. At least temporarily, investors are upbeat in their assessment of economic growth potential amid the Ukraine war. Also, some money managers are predicting that inflation is near peaking and that rate-hike expectations are overdone. The dollar is lower across the board, the dollar index seeing its biggest daily decline since late March. The USD/JPY rose another 1% this morning, reaching ¥129.40 before dropping briefly below ¥128. Oil and gold prices are steady.
-
FX Rates
April 20, 2022Rates 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 1.0844 GBP/USD 1.3054 USD/CAD 1.2518 AUD/USD 0.7424 USD/JPY 138.65 USD/CNH 6.4502 USD/ILS 3.2209 USD/MXN 20.0385 USD/CHF 0.9472 USD/INR 76.2075 USD/BRL 4.6558 USD/SGD 1.3645 USD/DKK 6.8581 USD/SEK 9.4510 USD/NOK 8.8215
-
USD
The dollar index has dropped today by nearly 0.50%, the most since late March, as demand wanes for the safe haven currency. A rally in USD Treasuries also helped drive the dollar lower – UST 10Yr yields at 2.88%, are down from yesterday’s high of 2.977%.
GBPAfter repeated attempts at driving the pound below $1.30 level, traders have given up, at least for the time being, as it now trades near $1.3050. An IMF report released yesterday stated that over the next two years the UK faces the worst inflation of all the major economies. The IMF predicted that the UK economy will contract by about 1% in both 2022 and 2023. There were no UK economic stats released today.EURThe euro moved back above $1.08 after touching $1.0760 twice earlier in the week. The second round of French presidential elections will be held on Sunday. Polls suggest that President Emmanuel Macron will win against nationalist rival Marine Le Pen, which should be mildly bullish for the euro, at least for the short-term. Eurozone Industrial Production for February was slightly better than expected, but its trade balance was much worse than January’s figure.
CADThe Canadian dollar outperformed most currencies last night, as US Treasury yields fell, and did so faster than Canadian government bond yields. Canadian inflation data for March showed it rising at a 6.7% pace, faster than expectations of 6.1% and February’s 5.7%. This will pressure the Bank of Canada to be more aggressive in tightening monetary policy.
ASIA/PACIFICThe Japanese yen traded to a fresh 20-year low (dollar high), the USD/JPY reaching ¥129.40 before profit-taking drove it lower, briefly below ¥128. Yen weakness is almost exclusively based on rising US interest rates and a hawkish Fed versus steady Japanese rates and a dovish Bank of Japan. There were no economic releases for Japan today, but inflation data will released tomorrow.
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/foreign-exchange-advisory
| Source: Bloomberg | |
This article is intended for U.S. audiences only. ©2023 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, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. |
