.png){kind=logo}
Risk-on mood continues, equities higher, dollar lower
The risk-on mood in the markets continued overnight, despite Phase 4 stimulus talks in Congress at a stalemate and legal challenges against President Trump’s proposed tax cut on capital gains announced yesterday. Asian equity markets were mixed, but European markets were in the green and US equities are opening higher. The dollar index is lower, Scandinavian currencies (NOK and SEK) outperformed and the Brazilian real and New Zealand dollar underperformed. US CPI released this morning of 0.6% for July was double the expected 0.3%. Bond yields moved higher on the news. Oil is firm and gold rallied after dropping briefly below $1,900.
“Everyone thinks of changing the world, but no one thinks of changing himself.”
-
FX Rates
August 12, 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 1.1798 GBP/USD 1.3049 USD/CAD 1.3262 AUD/USD 0.7164 USD/JPY 106.7200 USD/CNH 6.9342 USD/ILS 3.4078 USD/MXN 22.3589 USD/CHF 0.9112 USD/INR 74.8288
-
USD
The dollar index changed little overnight, but individual currencies performances against the dollar have changed. Gainers include NOK, SEK and CHF and losers BRL, JPY and NZD. Higher-than-expected CPI for July had little impact on markets this morning. US Treasuries were the exception, as 10YR yields reached 0.70%. Phase 4 stimulus talks at a stalemate in Congress, legal challenges to Trump’s proposed tax cut on capital gains, and Biden’s announcement of Kamala Harris as his running mate also had little impact on markets.
GBPThe pound declined, then gained, after an after better-than-expected UK GDP data. Although Q2 GDP declined by its worst-ever 20.4% QoQ, more recent June GDP MoM reached 8.7%, better than the 8.0% expected. Also, GDP for May was revised higher, from 1.8% to 2.4%. The pound continues to trade over $1.30 for August, but only barely.
EURThe euro edged higher on a lack of market-moving events or data releases. Eurozone Industrial Production for June (MoM) of 9.1% was lower than expected and last month’s. Europe’s corporate bond spreads tightened to their narrowest since early March, and are near pre-virus levels.
CADThe Canadian dollar gained after earlier losses, as oil prices rose and risk-on trading continued. Canada reported strong housing starts yesterday, but large currency speculators remain net short CAD.
ASIA/PACIFICThe USD/CNY currency pair dropped slightly overnight. Traders await a slew of important China economic data for July tomorrow: New Home Sales, Industrial Production, Retail Sales and Property Investment figures.
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. |
