US dollar rallies along other haven currencies
Cate Camerota | October 7, 2019
US dollar rallies along with other safe haven currencies as optimism for US-China trade talks diminishes. UK PM Boris Johnson makes another attempt at a Brexit deal and states that the UK will leave the EU on Oct 31 with or without an agreement. EUR/USD remains steady despite disappointing data releases.
Tuesday: Fed Chairman Powell speaks in Denver; Canada Housing Starts; US PPI
October 7, 2019
EUR/USD 1.0989 GBP/USD 1.2315 USD/CAD 1.3299 AUD/USD 0.6741 USD/JPY 106.97 USD/CNH 7.1284 USD/ILS 3.4984 USD/MXN 19.5668 USD/CHF 0.9951 USD/INR 71.0225
US-China trade talks start up again this week. US President Donald Trump has proposed a broad trade deal which is expected to be opposed by senior officials in China. The greenback is stronger this morning due to a risk-off market sentiment. On Tuesday, Fed Chairman Jerome Powell is scheduled to speak in Denver. Expectation is for Powell to reiterate that the economy faces risks but is in overall good shape. The FOMC September meeting minutes are due to be released on Wednesday.GBP
Sterling slightly weaker this morning after comments from Prime Minister Boris Johnson that Brexit will happen on Oct 31 whether or not the EU accepts the latest exit deal. GBP/USD continues to trade below the 1.23 handle.EUR
Data out of eurozone showed that investor sentiment hit its lowest level in more than six years. Germany also released factory orders which declined in August. EUR/USD remained largely unchanged, trading 0.1% lower.CAD
USD/CAD rose 0.5% last week and remains range-bound ahead of US-China trade talks. Key employment data out of Canada is set to be released on Friday. WTI is trading 1.1% higher this morning after declining 5.5% last week.ASIA/PACIFIC
JPY is stronger on demand for haven assets as the market awaits US-China trade talks. Trading may be muted given that Hong Kong and Chinese markets are closed and Sydney is on holiday.
AUD is down slightly this morning falling as much as 0.3% against the USD. This move is attributable to the markets anticipation of the trade talks between the US and China.
For more analysis on FX markets or information regarding SVB's FX services:
Thank you for subscribing to SVB's Daily FX Update.
You’re almost done. Please check your email box and follow the instructions to confirm your subscription. If you did not receive an email please check your Spam or Bulk E-Mail folder just in case the confirmation email got delivered there instead of your inbox. If so, select the confirmation message and mark it Not Spam, which should allow future messages to get through. We also suggest you whitelist the svb.com domain.
Please note that we will continue to send you communications that we need to send you (for example, to keep you updated on operational changes to your account, a product or a service) or that we are required to send you by law.
This article is intended for U.S. audiences only.
©2019 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.