Taper chatter weighs on USD

Strong equity markets capped gains for the safe-haven dollar as jobless claims fell 15K week over week. Investors are watching for tomorrow’s full employment report to see if the labor recovery is running out of steam following ADP’s disappointing jobs growth earlier this week. Biden is considering requiring US visitors be vaccinated and the WHO is asking countries to refrain from administering booster shots until other countries administer first rounds of vaccinations.

“I could never identify with that word, 'weak.'” 

Rihanna
  • FX Rates
    August 5, 2021

    Rates 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.


  • USD

    Amid risk-on sentiment, the dollar retreated for the third day this week following comments from Fed Vice Chair Clarida that 2023 rate hikes were on track. Clarida’s hawkish comments signaled a move to taper bond buying in late 2021 or early 2022 depending on labor market recovery. Jobless claims fell to 385K, down from 400K the week before.

    GBP

    Bank of England kept benchmark rates unchanged and warned tightening may be needed if inflation spikes above 4% this year. The pound advanced versus the dollar.

    EUR
    After finding a 1.19 top yesterday, the euro quickly gave up gains but losses were capped. Hawkish comments from Fed Vice Chair Clarida capped upside for the euro.
    CAD

    The Canadian dollar ticked higher within a 3 day range against the USD. Two-week lows in oil prices weigh on the currency. Merchandise trade surplus came out wider than expected today posting a CAD 3.2B surplus in June following a CAD 1.6B deficit in May.

    ASIA/PACIFIC

    The Australian dollar leads gains rising 0.41% versus the greenback.

    CNH advanced for the second day and China’s overnight interbank funding costs climbed for the first day after PBOC sold 10B of 7 day of reverse repos, draining 20B from the system.

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Kathryn Garvey
WRITTEN BY
Kathryn Garvey

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