Markets anxiously await tomorrow’s Fed FOMC meeting, when it is expected to taper by $10 billion its $120 billion asset purchase program. Global equities are taking a breather after many hit record highs recently. Australia’s central bank chose to remove its yield curve control, thereby joining other central banks in reducing emergency stimulus measures. The dollar gained slightly against the AUD as well as versus most other G-10 currencies. Global bond yields are softer and commodity prices are lower amid expectations of weak China economic data.
November 2, 2021
EUR/USD 1.1592 GBP/USD 1.3637 USD/CAD 1.2402 AUD/USD 0.7458 USD/JPY 113.79 USD/CNH 6.3991 USD/ILS 3.1457 USD/MXN 20.7247 USD/CHF 0.9132 USD/INR 74.6850 USD/BRL 5.6849 USD/SGD 1.3482 USD/DKK 6.4179 USD/SEK 8.5411 USD/NOK 8.4658
The dollar is broadly higher ahead of tomorrow’s Fed taper, a hawkish move fully expected by markets. US equities are a tad firm, and US Treasury 10-yr yield is steady at 1.56%, the 30-yr yield is 1.97%, up by 3 bps, but still below 2%.GBP
The UK pound is slightly lower versus the broadly stronger US dollar. The FTSE stock index is lower following yesterday’s 18-month high. Traders await the Bank of England meeting on Thursday with expectations of no change in policy.EURThe euro is unchanged from yesterday’s close. Eurozone Manufacturing PMI for October at 58.3 was slightly lower than expectations and September’s figure, both 58.5. Traders await this week’s EZ unemployment, PPI, and Retail Sales. Europe’s Stoxx 600 index fell slightly off yesterday’s record high.CAD
The CAD moved lower in line with broad US dollar strength and weaker oil/commodity prices. Traders remain bullish CAD after last week’s hawkish move by the Bank of Canada to end its QE program and its signal that interest rate hikes may occur sooner than expected.ASIA/PACIFIC
The Japanese yen was the only G-10 currency to gain overnight versus the dollar. Currency traders remain positioned well short the yen, so its overnight gain may be mostly due to position adjusting ahead of Japan’s holiday tomorrow (“Culture Day”) and the US FOMC meeting.
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/trends-insights/foreign-exchange-advisory
By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.
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. Please add us to your trusted list of senders, contacts or address book.
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.
©2021 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 and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.