.png){kind=logo}
Risk-on mood amid US vaccine deployment, upbeat US stimulus bill, Brexit news
Markets began the week in a bullish risk-on mood as investors were buoyed by upbeat news: Covid-19 vaccines will be deployed in the US this week; a bipartisan group in Congress may be ready with a pandemic relief bill; and, a UK/EU Brexit trade deal which still has potential for success this week. The dollar index dropped to fresh lows, as the UK pound outperformed G-10 currency peers. Equities are showing gains at the open, UST yields edged higher, and oil prices increased to $47.07 a barrel. This week, there is a full docket of global economic releases and central bank meetings, including the Fed, BOE, BOJ.
Economic releases:
Tuesday
US Empire State Manufacturing (Dec)
US Industrial Production (Nov)
US Capacity Utilization (Nov)
China Industrial Production and Retail Sales (Nov)
UK Employment data (Oct)
Wednesday
US Federal Reserve monetary-policy decision
US Retails Sales (Nov)
US Business Inventories (Oct)
US Manufacturing and Services Purchasing Managers’ Index (Dec)
Thursday
Central bank meetings: United Kingdom, Mexico, Switzerland
US Building Permits & Housing Starts (Nov)
US Leading Economic Index (Nov)
Friday
Central bank meetings: Japan, Russia
-
FX Rates
December 14, 2020Rates 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.
EUR/USD 1.2157 GBP/USD 1.3369 USD/CAD 1.2735 AUD/USD 0.7569 USD/JPY 103.6700 USD/CNH 6.5285 USD/ILS 3.2568 USD/MXN 20.1040 USD/CHF 0.8865 USD/INR 73.5712
-
USD
The US dollar dropped to fresh lows, as investors shift into risk-on mood in the markets. The dollar was sold amid news on vaccine deployment this week, a potential breakthrough in Congress with a $908Bn pandemic relief bill, and a possible Brexit trade deal. Increased global demand for US dollars for year-end funding purposes is starting to show up in currency option pricing.
GBPThe UK pound climbed as high as 1.7%, its largest gain in nearly two months following news that the UK and EU will carry on negotiating, providing hope that an agreement can still be reached before the December 31 deadline. The EU’s chief negotiator, Michel Barnier, said a trade deal could be agreed upon this week.
EURThe euro edged higher by nearly 0.5%, in-line with broad dollar weakness. Traders await Brexit news and begin to position for year-end funding needs.
CADThe Canadian dollar gained versus a broadly weaker dollar, fueled by a risk-on mood in the markets. The USD/CAD currency pair is trading around 1.2725, not far from last week’s low at 1.2707 and the lowest since April 2018.
ASIA/PACIFICBuoyed by demand from China for iron ore, the Australian dollar soared to fresh highs. Australia is the world’s largest producer of iron ore - used to make steel.
The Chinese yuan and Japanese yen were little changed.
For more analysis on FX markets or information regarding SVB's FX services:
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.
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. Please add us to your trusted list of senders, contacts or address book.
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.
| Source: Bloomberg | |
This article is intended for U.S. audiences only. ©2021 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and 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. |
