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Daily
FX Update

Traders anxiously await Fed Chairman Powell’s comments at central bank summit

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Major currencies are mixed and trading volume is light as the world awaits news out of Jackson Hole. Positive comments from Europe increased optimism for a soft Brexit and the euro failed to hold onto gains after positive PMI data.

"Exploring the unknown requires tolerating uncertainty."
Brian Greene, American Theoretical Physicist
  • FX Rates
    August 22, 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

    All eyes are on Jackson Hole ahead of the Fed Chairman Jerome Powell’s remarks slated for tomorrow. G10 currency movements are muted as markets await the tone of the comments. Yesterday afternoon saw the release of FOMC minutes which were mildly less dovish than expected giving the dollar a brief boost.

    GBP

    The pound popped slightly after French President Emmanuel Macron gave optimistic comments on Brexit saying said he is “confident” they could find “something intelligent” on Brexit talks in the next 30 days. Specifically, Angela Merkel tasked PM Johnson to come up with an alternative to the Irish backstop within 30 days. Gains to the currency are capped as uncertainty prevails.

    EUR

    The euro initially gained strength on better-than-forecast PMI data but failed to sustain gains and is headed towards a 3-week low. Gains were offset by macroeconomic events including a weaker Chinese currency, Brexit concerns and overall uncertainty in the market ahead of US Fed Chairman Powell’s speech set for tomorrow.   

    CAD

    The Canadian dollar gained some strength after not-so-dovish FOMC minutes and a better than expected Canadian CPI report. A pickup in oil prices further boosted the loonie. Apprehension in the market will persist today as traders await Powell’s speech tomorrow.

    ASIA/PACIFIC

    The Chinese yuan remains above the psychological 7 level and pushed 7.1 this morning – the weakest level in a decade. The psychology behind the weaker currency is that it will make capital more expensive to leave the country, while also making imports more expensive.

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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