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Daily
FX Update

Uncertainty regarding Brexit timing weighs on the pound and euro to close out the week

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The pound and euro are under pressure as uncertainty regarding Brexit timing and soft manufacturing numbers out of the Eurozone weighs on the currencies. Economic calendars are light today and markets await next week’s FOMC meeting for fresh direction.

Lucy Larcom, American Author
  • FX Rates
    October 25, 2019

    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 trading slightly higher to close out the week. The economic calendar is quiet with U. of Mich. Sentiment due out mid-morning. Next week’s FOMC meeting will provide another look at how the U.S. central bank sees the economy. Right now, futures pricing suggests an 89% chance of another interest rate cut.

    GBP

    The pound slid lower this morning as Brexit timing uncertainty persisted in the market. The EU will discuss the possibility of another delay beyond the October 31st deadline as PM Johnson seeks a snap election to form a majority government. It is unclear when then decision on the extension may come.

    EUR

    The euro followed the pound lower and slid back from recent highs. Manufacturing numbers yesterday showed the sector shrank for the ninth straight month. Mario Draghi passed over control of the ECB to former IMF leader Christine Lagarde who will inherit a group of weakened economies, central bankers at odds with one another, and negative interest rates.

    CAD

    The Canadian dollar gained strength and is heading towards a weekly gain of 0.4% versus the U.S. Dollar. Traders have ruled out a rate cut next week and anticipate the BoC to leave rates unchanged at 1.75%.

    ASIA/PACIFIC

    U.S. and Chinese trade officials are set to speak today to discuss plans on the specifics for Phase 1 of a trade deal between the U.S. and China. China will buy more farm good in return for the US cancelling planned and existing tariffs on Chinese imports.

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/foreign-exchange

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About the Author

Kathryn Garvey is a foreign exchange Associate for Silicon Valley Bank’s global financial services group and has been with SVB since July of 2018. Prior to SVB Kathryn completed co-op internships at Innosight, Market Metrics, and The TJX Companies.

Garvey graduated from Northeastern University in 2018 with a bachelor’s degree in finance, and marketing with elective coursework in entrepreneurship and innovation from Northeastern University.

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