Positive vaccine and lockdown news buoys markets

Equities around the world surged this morning after news that Moderna Inc’s Covid-19 vaccine was shown to be 94.5% effective. The S&P 500 opened at fresh record highs. News that the Biden administration does not support another nationwide lockdown coupled with a Trump tweet that acknowledges that Joe Biden won the election were also supportive of a risk-on mood. Asian assets and currencies rose after 15 Asia-Pacific nations signed the biggest trade deal in history. US Treasury yields edged higher, gold is off slightly and oil up slightly. A full docket of US economic data will be released this week.

Economic Calendar:

Monday: US Empire State Manufacturing Survey (Nov), Canada Manufacturing Sales (Sep), Bloomberg Survey of Eurozone Economic Forecasts (Nov)

Tuesday: US Retail Sales (Oct), US NAHB/Wells Fargo Housing Market Index (Nov)

Wednesday: US New Residential Construction (Oct)

Thursday: US Leading Economic Index (Oct), Initial Jobless Claims (week ending Nov 14)

Friday: Canada Retail Sales (Sep)

  • FX Rates
    November 16, 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

    This morning’s risk-on mood in the markets pushed the safe-haven Japanese yen and Swiss franc lower. On the other hand, major commodity currencies made gains, including the Norwegian krone, Canadian dollar, and the New Zealand and Australian dollars. The Asian-Pacific nation trade deal signed yesterday fueled rallies in Asian emerging market assets and currencies.

    GBP

    The UK pound is little changed over the weekend. Investors are optimistic that the UK-EU trade negotiations will reach a trade deal prior to the December 31 deadline. Prime Minister Boris Johnson is working to get his administration back on track after he was forced to self-isolate after close contact with a lawmaker who tested positive for the coronavirus, and after his most trusted aide, Dominic Cummings, and Communications Director Lee Cain, both resigned.

    EUR

    The euro is virtually unchanged over the weekend. Friday’s release of Eurozone 3Q GDP increasing by 12.6% compared to Q2 had little impact on markets. According to a Bloomberg survey of economists released this morning, the eurozone economy will contract by 7.3% in 2020, expand 4.7% in 2021 and 3.4% in 2022.

    CAD

    The Canadian dollar was the second strongest of the G-10 currencies after the Norwegian krone. Canadian manufacturing sales for September of +1.5% met expectations and exceeded August’s decline of 2.0%.

    ASIA/PACIFIC

    Yesterday, fifteen Asia-Pacific counties signed the biggest free-trade deal in history. After nearly a decade of negotiations, the Regional Comprehensive Economic Partnership (RCEP) is the first agreement to bring together China, Japan and South Korea. Asian EM currencies performed well following news of the agreement.

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