UK PM Boris Johnson will suspend parliament for 5 weeks in the lead up to Oct 31 Brexit deadline
Laurence Hayward | August 29, 2019
Pound volatility will rise as driven by news from the UK that parliament will be out. Individual members will take advantage of the lapse to make their own voices heard. The Chinese appear to be trying to dampen the rhetoric on trade tariffs with the US.
"To see things in the seed, that is genius."Lao Tzu
August 29, 2019
EUR/USD 1.1065 GBP/USD 1.2196 USD/CAD 1.3297 AUD/USD 0.6740 USD/JPY 106.39 USD/CNH 7.1428 USD/ILS 3.5291 USD/MXN 20.1049 USD/CHF 0.9841 USD/INR 71.7762
The dollar continues it’s slow strengthening, helping the Dow yesterday which rose 258 points. There was some optimism on trade talks with China after the Trade Minister said they will not put new tariffs on the US in place immediately. The US yield curve inverted with the 10 year yield falling below the 2 year. Some pundits view this as a pre-cursor to a recession.GBP
Boris Johnson said he will suspend parliament for over 5 weeks before the Brexit deadline. Parliament will be closed between mid-September and mid-October. This will be the longest suspension since 1945. The house speaker John Bercow said it was obvious this would limit parliament’s ability to discuss Brexit. This could lead to a vote of no confidence and a general election. The pound slumped on the news and was trading down this morning.EUR
The euro weakened against the US dollar due to dollar strength. Christine Lagarde said the ECB has not hit its low on interest rates yet.CAD
The Canadian dollar strengthened after direct investment rose to its highest level in 4 years and WTI oil climbed back above $56 a barrel.ASIA/PACIFIC
The Chinese Yuan is trading above 7 as weakness persists following its worst month in history falling about 4%. Other Asian currencies also look very soft due to the trade dispute with China. The aussie is holding in its recent range and the New Zealand dollar is weaker again.
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.
©2019 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.