Stocks gain in risk-on mood, dollar higher on upbeat US economic data
Global stocks were generally up overnight and US markets opened higher following slightly better-than-expected US inflation and Personal Spending data. Trading in the financial markets is light today amid month-end position adjusting and ahead of the long holiday weekend in the US. On Monday the stock and bond markets will be closed for Memorial Day. SVB’s FX Desk is closed on Monday.
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May 28, 2021
EUR/USD 1.2164 GBP/USD 1.4153 USD/CAD 1.2084 AUD/USD 0.7708 USD/JPY 110.00 USD/CNH 6.3717 USD/ILS 3.2515 USD/MXN 19.9631 USD/CHF 0.9007 USD/INR 72.4362 USD/BRL 5.2343 USD/SGD 1.3238 USD/DKK 6.1132 USD/SEK 8.3139 USD/NOK 8.3433
US Core PCE, the Fed’s preferred measure of inflation, rose 3.1% YoY and 0.7% MoM in April, slightly higher than expected. Personal Spending contracted by 13.1%, better than -14.2% expected, and less than March’s +21.2%. The dollar is broadly higher, its best performances against the two antipodes – AUD and NZD.GBP
The UK pound is lower following news that the UK’s plan to end pandemic restrictions on June 21 is in doubt. The Bank of England’s Gertjan Vlieghe commented that the BOE could raise interest rates early next year fueled by strong economic recovery, lower unemployment and low wage pressures.EUR
The euro is lower, but in line with the broadly higher USD. European stocks are headed for a strong end to the week. Consumer/Economic/Industrial confidence data for the Eurozone in May exceeded expectations. Traders look forward to next week’s EZ labor and inflation data.CAD
The loonie is weaker against the US dollar. There were no economic data releases for Canada today. Next week there will be a full docket, including GDP and employment data. FX speculators continue holding large long CAD positions.ASIA/PACIFIC
The USDCNY continues to trade under 6.40, reaching a low of 6.3611 overnight. The PBOC set the daily USDCNY fixing slightly higher than expected, a subtle signal that it wishes to slow, but not necessarily reverse, the yuan’s recent appreciation.
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