Sterling hit a 7-month high and markets move to risk-on following optimism on US-China trade deal
Cate Camerota | December 4, 2019
UK polls show the Conservative Party is holding their lead against the Labour Party, pushing sterling higher towards the 1.31 handle. News that progress is being made on the US-China deal has helped support risk-on trading. Bank of Canada will release its rate decision at 10AM EST today, the loonie has been supported heading into the decision.
"If you're lucky enough to be different, never change"Taylor Swift
December 4, 2019
EUR/USD 1.1109 GBP/USD 1.3094 USD/CAD 1.3268 AUD/USD 0.6849 USD/JPY 108.68 USD/CNH 7.0502 USD/ILS 3.4665 USD/MXN 19.4958 USD/CHF 0.9872 USD/INR 71.4610
The US dollar weakened on the data release showing that ADP employment change numbers were weaker than expected. Markets will remain focused on additional data releases this week including ISM later today and employment data later this week.GBP
The British pound broke through the 1.3013 resistance and is currently trading near the 1.31 handle. The move higher is a result of polls showing that the Tories are holding their lead over the Labour Party and as US President Trump’s visit to the UK went relatively smoothly.EUR
EUR/USD broke above the 1.1100 handle following the US data release of ADP employment change which showed an increase of 67k vs. the expectation of 135k. Traders will be focused on ISM numbers which will be released today at 10AM EST.CAD
USD/CAD is lower this morning as the markets anticipate the rate decision and Bank of Canada meeting. The rate decision will be released at 10AM EST - the market is pricing in a 7% chance of a 25bp cut today and a 22% chance of a cut in January.ASIA/PACIFIC
USD/JPY is higher for the first time in five days trading up to 108.79. The Japanese yen weakened on news that China and the US are getting closer to an agreement on the number of tariffs that will be rolled back as part of phase one of the trade agreement.
AUD/USD dropped the most in two weeks following reports that showed a miss for economic growth forecasts. The currency pair fell as much as 0.5% but has reversed these losses trading back up towards 0.6850.
For more analysis on FX markets or information regarding SVB's FX services:
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. We also suggest you whitelist the svb.com domain.
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.
©2019 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of 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.