FX Update

US dollar hits two-year high

The Bloomberg Dollar Index advances gains for its 10th consecutive trading session. Yesterday’s FOMC guidance clearly distinguished its rate cut as not the start of a new monetary easing cycle. BoE officials hold rates and asset purchases at today’s policy meeting as Parliament grapples with rising Brexit concerns.

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  • FX Rates
    August 1, 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 Federal Reserve delivered a hawkish hold as it cut the federal funds rate by 25 basis points to a range between 2% - 2.25%. While the market fully expected a downward adjustment to rates, many were expecting Fed Chair Powell to hint at future easing. However, he labelled the cut “a mid-cycle adjustment to policy” intended to “insure against downside risks” and would not commit to a long series of cuts. President Trump was open in his criticism, writing on twitter “As usual, Powell let us down”.


    The pound fell below 1.21 to the dollar for the first time since January 2017 after BoE officials left rates unchanged and maintained asset purchases at current levels. On the Brexit front, Boris Johnson ramped up his Brexit “do or die” pledge as the government set aside another £2.1 billion pounds to prepare for a no-deal divorce from the EU.  

    The euro touched a new 27-month low on the back of the Fed’s less-dovish-than-expected guidance. Upward revisions to July eurozone PMI data did little to protect the common currency as traders price-in further policy easing from the ECB in September.

    The loonie neared six-week highs as the Fed refrained from signaling an easing cycle and commodity markets rest in risk-off mode. PMI data out of Canada for July beat previous month’s numbers, but had little to no effect on the currency.


    The Japanese yen reached a two month peak above 109 in reaction to the Fed’s first-in-a-decade rate cut. Risk-off sentiment trickles back into the market as the currency recovers earlier losses.

    Manufacturing readings in China delivered an upward surprise with the Caixin PMI arriving at 49.9 against an expected 49.5.  

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