Markets retreat, retail sales disappoint

Equity markets retreated from their recent rally, which had produced fresh record highs in many indices around world. Investors are weighing encouraging news regarding a new Covid-19 vaccine against depressing news that the virus continues to spread in Europe and the US. The dollar edged lower, particularly against the Chinese yuan – the USD/CNY fell to fresh 2½ year low. US Treasury yields dropped after US Retail Sales for October missed expectations. Oil and gold prices are steady.

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”
Margaret Mead, American cultural anthropologist
  • FX Rates
    November 17, 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 index is lower and fairly mixed across its peer currencies. The Chinese yuan continues to gain following the huge regional trade deal signed by 15 Asian nations on Sunday. Overnight trading was light, as traders digest weak US Retail Sales for October, the continuing pandemic, and a Washington that remains stalled on a fiscal stimulus package.

    GBP

    The UK pound is trading higher on indications that the UK-EU trade negotiations are making promising advances. Market chatter is that a deal may be signed as early as next week.

    EUR

    The euro is up slightly overnight in-line with broad dollar weakness. A dearth of eurozone economic news recently has led to a drop in EUR/USD option volatility to its lowest level since May. 3-Month implied volatility is just above 6%. The currency pair is trading near the top of its two month trading range: $1.16-1.19.

    CAD

    The Canadian dollar weakened overnight, but remains within its recent 1.30-1.32 trading range. Canadian Housing Starts (Oct) came in weaker than expected this morning, while Wholesale Trade Sales (Sep) exceeded expectations.

    ASIA/PACIFIC

    The Chinese yuan continues to outperform, advancing against the dollar to its strongest level in more than two years. Traders are optimistic about China’s relatively strong economic recovery, and investors are attracted to China’s interest rate premium over other major nations. A Biden presidency is expected to be friendlier to China.

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.

Dollar heavy in thin trading

 

Daily FX Update: Currencies confined to narrow range ahead of Thanksgiving holiday

 

Daily FX Update: Risk-on sentiment persists

 

Daily FX Update: Dollar falls to two-year lows amid month-end flows and vaccine optimism

 

Daily FX Update: Stocks and bonds mixed, dollar up slightly, copper soars

 

Daily FX Update: Dollar gains with focus on new virus restrictions