Daily FX Update: US dollar flat before data

Peter Compton

June 22, 2020

A heavy week of economic data in the US kicks off with positive risk sentiment

The US dollar started the week slightly weaker vs. a basket of currencies as market sentiment turned positive. No new significant outbreaks of Covid-19 is expected to lead to more equity market gains and a weakening of the US dollar. The British pound gained after the Bank of England seemed to pivot on the size of its balance sheet.

Tuesday: Markit PMI for June, New Home Sales for May

Wednesday: Mortgage Applications and House Price Index

Thursday: Durable Goods Orders for May, Weekly Initial Jobless Claims

Friday: Personal Income and PCE Deflator for May, University of Mich. Sentiment Index for June

FX Rates
June 22, 2020

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.

EUR/USD 1.1223
GBP/USD 1.2408
USD/CAD 1.3569
AUD/USD 0.6885
USD/JPY 106.8600
USD/CNH 7.0746
USD/ILS 3.4438
USD/MXN 22.4061
USD/CHF 0.9503
USD/INR 76.0250
USD
Financial markets defaulted to economic optimism this morning with the US dollar weakening due to risk-on trading. A heavy week of economic data will test the bulls as more job loss figures and other data will show a weak US economy.
GBP
The pound is stronger this morning after Bank of England governor Andrew Bailey said the balance sheet must be shrunk before interest rates are increased. The announcement signals a change in policy to sell bonds (or let them mature) accumulated during quantitative easing.
EUR
The euro strengthened on overall US dollar weakness. Optimism surrounding a resolution to the German court findings on the ECB bond buying program also helped push the euro higher.
CAD
The Canadian dollar was flat versus the US dollar as the price of oil held steady.
ASIA/PACIFIC
The Japanese yen weakened slightly as markets opened Monday with a “risk-on” tilt.

The Chinese renminbi strengthened slightly versus the dollar as the most recent outbreak of coronavirus appeared to be contained.

The Australian dollar gained after RBA Governor Lowe commented that recent gains in the A-dollar are not a problem and he does not see the currency as overvalued.

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/trends-insights/foreign-exchange-advisory

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Source: Bloomberg

This article is intended for U.S. audiences only.

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WRITTEN BY

Peter Compton

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