Vaccine news pushes equities higher, dollar higher

News that China is testing an antiviral vaccine fueled a risk-on rally in financial markets. Global equities are higher, and bond yields and safe-haven currencies are trading lower. The US dollar is higher against most of its peer currencies,  following this morning’s unexpectedly strong ADP Employment data.

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  • FX Rates
    February 5, 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.


  • USD

    The dollar is higher with an overall risk-on sentiment in the markets. Higher US equities combined with upbeat ADP Employment data and a narrowing annual trade deficit increased demand for the dollar, pushing the dollar index to fresh YTD highs.

    GBP

    Better-than-expected UK services PMI led traders to reduce odds of a Bank of England rate cut. The UK pound initially edged higher, but then dropped to $1.30 on news that the EU may enforce rules which would negatively impact London’s key banking sector.

    EUR

    The euro is trading lower, approaching $1.10 once again. Traders are focused on the YTD low of $1.0993. Eurozone PMI’s came in mixed today: better-than-expected in Italy and the Eurozone Composite, worse than expected in Spain, and as expected in Germany.

    CAD

    The USD/CAD reached 1.33 again, but then traded lower as oil prices rose back above $51 per barrel. Canada’s trade deficit narrowed in December, due mostly to higher oil exports.

    ASIA/PACIFIC

    The People’s Bank of China set the USD/CNY reference rate lower and below the psychologically important 7 per dollar. Analysts are attempting to determine the negative impact of the coronavirus on China’s economic growth. The latest reports expect GDP Q1 growth to drop to 4.5% y/o/y, down from 6% in Q4 2019.

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Scott Petruska, CFA
WRITTEN BY
Scott Petruska, CFA

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