US dollar trading at one-month highs
It’s a big week ahead for central bank decisions, including the Fed and Bank of England. Markets have shifted towards long US dollar and pushed up the greenback to levels not seen in a month. Commodity prices have slumped, impacting commodity-linked currencies including the Australian and Canadian dollars. The election in Canada seems to be a close one, but odds suggest current Prime Minister Justin Trudeau will be re-elected.
This week's economic data releases:
Tuesday: US Housing Starts
Wednesday: Federal Reserve Rate Decision
Thursday: Bank of England Bank Rate, US Initial Jobless Claims
September 20, 2021
EUR/USD 1.1712 GBP/USD 1.3675 USD/CAD 1.2825 AUD/USD 0.7255 USD/JPY 109.57 USD/CNH 6.4775 USD/ILS 1.2124 USD/MXN 20.1365 USD/CHF 0.9295 USD/INR 73.7375 USD/BRL 5.3125 USD/SGD 1.3515 USD/DKK 6.3485 USD/SEK 8.7125 USD/NOK 8.7280
The Bloomberg dollar index strengthened 0.3% to the highest level since August 23. The US dollar advances ahead of a busy week for central bank announcements. The Fed will announce its policy decision on Wednesday with the expectation that the central bank will suggest a move towards tapering.GBPSterling dropped to one-month low on broad US dollar strength. Markets are speculating that the drop in energy prices will make it more difficult for the Bank of England to raise rates.EUREUR/USD fell as much as 0.2% hitting a low of $1.1700. One-week volatility for the currency hit its highest level in almost 2 months ahead of central bank meetings and federal elections in Germany.CAD
Current Prime Minister Justin Trudeau is set to maintain his seat in a close election today. USD/CAD is trading near one-month high on overall USD strength.ASIA/PACIFIC
The risks from China Evergrande Group’s debt crisis is hurting sentiment on commodities, including iron ore. Currencies linked to commodities including the Australian dollar are trading lower on the news. AUD/USD down as much as 0.5%.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory
By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.
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. Please add us to your trusted list of senders, contacts or address book.
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.
©2021 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and 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.