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US dollar falls the most in one day since 2016 following Fed stimulus
The Federal Reserve released an unprecedented stimulus plan encouraging traders globally to take on risk causing the US dollar to weaken as much as 1.5%. The package included the Fed stating it would buy an unlimited amount of government bonds in an effort to keep borrowing costs low and expand its Money Market Mutual Fund Liquidity Facility. The market is still awaiting a stimulus plan from the US which has yet to be passed by Congress. It appears that China has contained the virus but it is still spreading other places and the death toll worldwide now exceeds 16,500.
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FX Rates
March 24, 2020Rates 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.
EUR/USD 1.0813 GBP/USD 1.1745 USD/CAD 1.4471 AUD/USD 0.5912 USD/JPY 111.00 USD/CNH 7.0738 USD/ILS 3.6400 USD/MXN 24.7984 USD/CHF 0.9785 USD/INR 76.1025
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USDThe US dollar reversed direction and headed lower following the release of the Fed’s stimulus plan. The dollar had it’s worst day in four years as investors moved towards more risk-on assets.GBPSterling rose as much as 2.2%, even after the UK began a full lockdown to contain the coronavirus. This move in the pound was partially in reaction to the broad US dollar weakness across the board.EUREUR/USD has traded fairly mixed as traders largely overlook data out of the EU and focus on the stimulus package from the Fed. Despite weak Eurozone PMI numbers (31.4 vs. 51.6 expectation) released today, the EUR continues to trade higher than the US dollar.CADDespite broad US dollar weakness, the Canadian dollar underperforms all peers continuing to trade around the 1.45 handle. The Fed’s stimulus plan shifted market sentiment toward less risk-off and sent the US dollar lower.ASIA/PACIFICThe Australian dollar rallied from multi-year lows following the move lower for the US dollar.
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See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory