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Daily
FX Update

The UK pound rallies on Brexit optimism, dollar firms on trade talks

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The UK pound rallied to a five-month high fueled by optimism of a near-term Brexit deal. The US dollar index gained as US-China trade talks resume, Trump demands that Turkey enact a cease-fire, and JP Morgan beats expectations as Q3 earnings season begins.

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
Winston Churchill
  • FX Rates
    October 15, 2019

    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

    The dollar held steady today, but is 0.25% lower since last Friday. Traders are cautious even as US-China made “substantial progress” and as Trump demands Turkey enact a cease-fire as he slaps sanctions on key Turkish officials and steel imports. The Q3 US earnings season kicked off with JP Morgan’s better-than-expected results.

    GBP

    The UK pound jumped higher following news that EU chief negotiator Michel Barnier said a Brexit deal is possible this week. The pound is trading over $1.26, its highest level since June, and up 5% from August’s lows near $1.20.

    EUR

    The euro dropped ahead of today’s closely-watched German ZEW survey of economic sentiment, reflecting institutional investors’ opinions for the next six months. The data, just released, was weaker than expected - another show of concern that Germany has fallen into recession amid trade tensions.

    CAD
    The USD/CAD currency pair gained slightly over the long weekend, and now trades solidly over 1.32. The weaker Canadian dollar can be attributed to soft oil prices and the generally stronger US dollar in the FX markets. Also, the closely-followed US-Canada 2-year yield spread moved lower to a two-year low of minus 7 basis points (Canada yields less than US).
    ASIA/PACIFIC

    The Chinese yuan and the Japanese yen both weakened slightly today from the generally stronger US dollar. China releases its Q3 GDP on Friday.

Contact Us

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/foreign-exchange

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About the Author

Scott Petruska is Chief Currency Strategist and senior advisor for Silicon Valley Bank’s global financial services group, and is based in Boston, MA. He advises clients on currency and interest rate hedging strategies, and helps them with other aspects of global banking. He regularly writes blogs on topics covering the global financial markets, conducts client seminars and webinars, and speaks at regional financial conferences.

Petruska has more than 30 years experience in the currency and interest rate markets, and has lived and worked in Boston, Chicago, New York City, Singapore and Tokyo. Prior to joining SVB in 2009, he worked at several large international financial institutions, including National Westminster Bank, Irving Trust, Bank of New York, State Street Bank and Commerce Bank. He has been an institutional trader, product developer, analyst, salesperson and advisor.

Petruska has been awarded several professional designations, including the CFA (Chartered Financial Analyst), FRM (Financial Risk Manager) and CMT (Certified Market Technician). He earned his undergraduate degree in Finance & Banking from the University of Wisconsin.

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