Weak jobless claims data fuels strong dollar and lower equities

Initial jobless claims totaled 2.98 million last week, greater than expectations of 2.5 million. The data fueled the risk-off mood already in place overnight, leading to a stronger US dollar, weaker equities, lower bond yields and firm gold prices. Heavyweight hedge fund traders are publicly stating their views that stocks at current levels are largely overvalued.

“You must be the change you wish to see in the world.”

Mahatma Gandhi
  • FX Rates
    May 14, 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

    Despite worse-than-expected jobless data, US dollar strength is resilient and is extending yesterday’s up day. The broad risk-off mood hit global equity markets hard overnight, and the S&P looks set to open lower here as well. Several top hedge fund operators are sharing their bearish views at current levels after the historic rebound from March’s lows.

    GBP

    The UK pound is lower by nearly 0.5% amid broad dollar strength and after Bank of England Governor Andrew Bailey said he would not dismiss the idea of negative interest rates in the UK.

    EUR

    European equities are all in the red, stock indices down between 1% to 3%. Italy approved a long-expected €55bn package which is meant to support businesses and families in the form of tax cuts and extra funding. After reaching near $1.09 yesterday, the euro has dropped below $1.08 this morning.

    CAD
    The Canadian dollar is virtually unchanged overnight despite weak Manufacturing Sales in Canada for March, declining by 9.2% versus -5.7 expected. Oil is higher, trading near $26 a barrel. Traders await the Bank of Canada meeting later this morning. Although no change in rates is expected, traders will be looking for comments on further stimulus in the press release and the BOC’s quarterly Monetary Policy Report.
    ASIA/PACIFIC
    The Australian dollar got hit following weak employment data. Australian employers cut workers by a record 594,300 in April. Unemployment rose to 6.2%, below 8.2% expected, but underemployment rose to a record 13.7% and work hours declined by more than 9%. The AUD/USD has been trading mostly in a narrow $0.63 to $0.6550 over the last month.
Contact Us

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

Subscribe to receive the Daily FX Update in your inbox.

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 privacy@svb.com. You can withdraw your consent at any time.

Insights from SVB Industry Experts

 
SVB experts provide our customers with industry insights, proprietary research and insightful content. Check out these related articles that may be of interest to you.

Commodity-linked currencies decline as USD gains

 

Daily FX Update: US dollar on track for largest 2-day gain in 7 weeks

 

Daily FX Update: Dollar ends lower for sixth straight week

 

Daily FX Update: Dollar steady after GDP slump

 

Investors sell dollar ahead of Fed meeting

 

Dollar stronger and gold retreats for $2,000