Dollar strong versus haven currencies and the pound ahead of FOMC minutes
Kathryn Garvey | August 21, 2019
July FOMC minutes due out this afternoon are the driving force in the market. A risk-on appetite has returned as traders square up positions ahead of their release. UK PM Boris Johnson is on his first visit to Berlin this week to kick off another round of Brexit negotiations. Strong data out of Canada drove the loonie higher.
“The two most powerful warriors are patience and time”Leo Tolstoy
August 21, 2019
EUR/USD 1.1098 GBP/USD 1.2131 USD/CAD 1.3258 AUD/USD 0.6796 USD/JPY 106.44 USD/CNH 7.0681 USD/ILS 3.5245 USD/MXN 19.7049 USD/CHF 0.9806 USD/INR 71.5525
USDThe dollar is steady after the dollar index reached its highest level yesterday since December. The dollar is stronger against haven currencies and the pound. July FOMC minutes will be released later today and traders will read between the lines for signs of FOMC's next moves. ECB minutes are released tomorrow and the Jackson Hole symposium on Friday will be closely watched for signals of future easing. US economic data out today includes July existing home sales.GBP
Boris Johnson is in Germany today on his first official visit as Prime Minister. Johnson and European leaders will kick off a series of meetings in an attempt to negotiate a divorce deal with the October 31 deadline fast approaching.EURThe euro held up despite news that Italian Prime Minister Giuseppe Conte resigned yesterday after clashing with his interior minister. Germany’s auction of 30-year bonds with a yield of -11 bps was met with meager demand. It showed that further interest rate cuts by the ECB will continue to provide diminishing returns in the attempt to starve off a recession.CADThe Canadian dollar was pushed higher after crude oil prices rose and Canadian CPI stayed unchanged at 2% vs 1.7% expected. The firmer than expected inflation number gives policy makers less reason for immediate interest rate cuts.ASIA/PACIFIC
Japanese and American negotiators will meet in Washington DC over the next few days in an attempt to compromise on car and beef exports. JPY trades weaker amid a mild risk-on sentiment ahead of FOMC minutes.
The Chinese yuan slipped later in Asia hours after the central bank set the daily reference rate a bit stronger than expected.
For more analysis on FX markets or information regarding SVB's FX services:
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. We also suggest you whitelist the svb.com domain.
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.
©2018 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of 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.