Investment Managers Securities Analysts

Bermuda & Cayman

Currency Markets

Source: Bloomberg
The Japanese yen strengthened against all G10 currencies on safe haven demand.

World Currency Markets

• On October 26 the Brazilian real appreciated 0.6 percent to reais 3.6423 against the US dollar ahead of the weekend presidential election in which market-preferred presidential candidate Jair Bolsonaro was expected to defeat leftist rival Fernando Haddad. The real’s gain was underpinned by hopes of much-needed economic reforms promised by the Bolsonaro campaign.

• On November 12 the euro fell to €0.8914 against the US dollar and Sterling weakened to US$1.2848 as hopes for an imminent Brexit agreement faded and Italian budget woes persisted. In the UK the Sunday Times reported that four more UK ministers were on the brink on resigning over Prime Minister Theresa May’s Brexit plans. Meanwhile in the eurozone, ECB Vice President Luis De Guindos said that Italian contagion risk shows need for budget discipline.

• On November 26 the Mexican peso depreciated 0.9 percent to 20.2167 against the US dollar as US President Trump threatened to shut down the US’ southern border “if needed.” US agents shot tear gas at migrants who attempted to breach the border and Mexico’s incoming government denied reports of a deal with the US on asylum seekers, who would be required to wait in Mexico until their claims move through US courts.

• On December 10 UK Prime Minister Theresa May postponed the UK parliament’s vote on Brexit. The deal ceded financial and trade regulation and, remarkably, the ability to amend or end the Brexit agreement to the EU. Sterling depreciated 1.9 percent versus the US dollar on the news and fell to $1.2489 on December 11. The postponement in turn led to a no-confidence vote which May won on December 12.

• On December 25 the Japanese yen strengthened to ¥110.29 against the US dollar on safe haven demand after US President Trump refused to sign a bill funding the US government, setting up a last-minute showdown with Democrats in the Senate.

• On December 28 crude oil prices once again fell below US$45 per barrel and currencies of nations heavily exposed to oil depreciated against the US dollar. The Canadian dollar weakened to CA$ 1.3655 per US dollar while the Norwegian krone depreciated to NOK 8.7731 per US dollar.