Markets pause, dollar edges higher after a big down week

Equity markets are pausing to end what’s been another upbeat week. The US dollar has edged higher overnight after a most difficult week, having lost between 1-2% against most of its G-10 peers. Investors are digesting snags in EU-UK post-Brexit trade talks and on slow progress with the US fiscal spending deal. US equities are opening up slightly, bond yields are steady, and the dollar index up by 0.15%. Oil and gold prices are steady.

“The life of inner peace, being harmonious and without stress, is the easiest type of existence.”
Norman Vincent Peale
  • FX Rates
    December 18, 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 higher across the board overnight, but traders remain bearish the dollar over the long-term. Demand for foreign currencies comes amid market optimism related to Covid-19 vaccines deployment, fiscal policy approaching agreement, the Fed’s “lower for longer” message and negative real rates in US treasuries.

    GBP

    The UK pound is the worst performing currency in overnight trading as the  post-Brexit trade negotiations struggle with fishing rights.

    EUR

    The euro moved little overnight, but trades comfortably over $1.22. The currency is up nearly 1.2% this week, having reached its highest level since April 2018. This week’s slew of economic statistics generally positively surprised.

    CAD

    The Canadian dollar eased overnight, despite Canada’s Retail Sales exceeding expectations. Sales in October rose 0.4% over September, it’s sixth straight monthly gain, compared favorably with survey predictions of no change. The USD/CAD dropped below 1.28 this week for the first time since September 2018.

    ASIA/PACIFIC

    The Chinese yuan has changed little overnight, and is ending the week virtually unchanged. The USD/CNY currency pair remains well within a downtrend which began in June.

    The Japanese yen moved little overnight. Comments by BOJ Governor Kurado yesterday left investors wondering how long the BOJ will remain committed to its ultra-easy monetary policy. He said that in March they will announce findings of a study on the success of its main monetary policy outline.

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/trends-insights/foreign-exchange-advisory

Subscribe to receive the Daily FX Update in your inbox.

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.

Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

Insights from SVB Industry Experts

 
SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.

Daily FX Update: Risk-off mood drives stocks lower, dollar higher

 

Daily FX Update: Stocks soar, dollar lower, strong US housing data

 

Daily FX Update: Inauguration Day! Markets buoyant, dollar soft

 

Daily FX Update: Investor optimism weakens safe haven currencies

 

Daily FX Update: Dollar surges as economy weakens

 

Daily FX Update: Dollar up on stimulus news