Global equities are higher as traders digest the latest news on the Omicron variant and the surprisingly hawkish comments by Fed Chair Powell. Bond yields are higher, but the 10-Yr remains below 1.5%. The US dollar is broadly weaker, particularly against the commodity currencies, while demand for safe haven currencies, including the dollar, JPY, and Swiss franc, is lower. This morning’s US economic data was better than expected, and traders now await Friday’s US jobs data for November. Oil prices jumped today ahead of a two-day OPEC meeting to discuss oil production levels.
December 1, 2021
EUR/USD 1.1341 GBP/USD 1.3327 USD/CAD 1.2733 AUD/USD 0.7156 USD/JPY 113.06 USD/CNH 6.3673 USD/ILS 3.1554 USD/MXN 21.2251 USD/CHF 0.9190 USD/INR 74.9113 USD/BRL 5.6185 USD/SGD 1.3627 USD/DKK 6.5578 USD/SEK 9.0352 USD/NOK 9.0390
In today’s risk-on environment, the US dollar index is lower by 0.2%. Individually, the US dollar is weakest against the commodity currencies – the MXN, AUD, NZD, and RUB. This morning’s Institute of Supply Management (ISM) Manufacturing index increased to 61.1, in line with expectations and higher than October’s 60.8. A reading above 50 indicates that manufacturing is expanding.GBP
The UK pound has rebounded sharply from yesterday’s low at $1.3195. UK Housing Prices in November exceeded expectations, while PMI Manufacturing met expectations. Traders await the next Bank of England meeting on December 16, when odds favor a 10-15 bp hike. BoE Governor Andrew Bailey speaks later today, and traders will look to see if he provides a hawkish surprise as Fed Chair Powell did yesterday.EUR
The EUR swung by a half percent today but sits little changed from yesterday’s close. Eurozone Manufacturing PMI for November was slightly less than expected and lower than October’s. Traders await a full docket of economic releases over the next few days, including Eurozone Unemployment, PPI, Retail Sales, and Investor Confidence.CAD
The Canadian dollar moved higher on the back of higher oil prices and the risk-on mood in the markets. Traders await Friday’s jobs data for Canada and next week’s Bank of Canada meeting – no hike is expected.ASIA/PACIFIC
The Australian and New Zealand dollars were outperformers overnight on the back of the risk-on market mood, which is driving higher foreign currencies and commodities.
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
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.
This article is intended for U.S. audiences only.
©2022 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, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.