Positive sentiment on vaccine rollout and lifting of lockdown weakens safe-haven currencies

Positive sentiment on vaccine rollout and lifting of lockdown weakens safe-haven currencies

The dollar weakened this morning along with the Swiss franc and Japanese yen as investor sentiment turned positive. President Biden's pledge to vaccinate 200M Americans within the first 100 days in office supports the view of a stronger US economy. Also, the Federal Reserve announced banks that pass stress tests can pay dividends again after mid-year and Germany withdrew Easter lockdown restrictions.  

"I don't think limits."
Usain Bolt
  • FX Rates
    March 26, 2021

    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 weaker versus commodity currencies, along with the pound and euro, but gained versus other safe-haven currencies such as the Japanese yen and Swiss franc. 

    The PCE Deflator for February came in at 1.6% YoY which was in line with expectations. When inflation data for March is released later next month expect stronger inflation growth compared to prior year when the pandemic led to a global lockdown.

    GBP

    The pound rebounded from some of its recent losses as February retail sales strengthened. The volume of goods sold in shops and online rose 2.1% from January - sales excluding auto fuel climbed 2.4%. GBPUSD has gained 0.76% over Thursday's trading and into this morning, whilst GBPEUR gained almost 1% over the same period.

    EUR

    The euro sunk overnight to its weakest level versus the US dollar in 4 months and then rebounded strongly as the New York trading session begins. Overall risk-on hurt the dollar.

    CAD

    The Canadian dollar bounced back after yesterday’s losses reflecting the oil price which is also higher this morning. Some traders see the Canadian commodity complex gaining should the US undertake a massive infrastructure spend. Also, the Bank of Canada meets next month and there is some market speculation the Canadian central bank may discuss tapering its quantitative easing measures; A move determined to be bullish for the loonie.

    ASIA/PACIFIC

    The Japanese yen is trading at the weakest level in a year as safe-haven currencies sell off. Higher commodity prices lift the Australian dollar.

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Peter Compton
WRITTEN BY
Peter Compton

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