Thursday 31 August 2023
Some USD weakness in the past 24 hours following the softer US data and some movement in the Euro this morning first getting a lift from French inflation data then retreating after comments from ECB's Schnabel. EZ CPI data on the horizon should stem further falls though. Comments this morning from BOE's Pill offer nothing new and GBP suitably unmoved. Some USD demand returning as I type.
Month-end USD flow signals point to mild buying interest still with strongest versus CAD but also some EUR corp demand again too. How much is left to be done on the final day is unknown but keep an eye on last London fix of the month at 16.00 BST.
Equities are on the rise from yesterday's lows while WTI has held at $80.70 after capping at $81.85 and also on the rise again this morning and posting $81.70 as I type as the secon-guessing continues. Gold finding support around $1940 now after rallying through yesterday but sellers now prevailing into $1950 as the jury remains out and tight ranges prevail. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension but also the Middle East among other areas of conflict.
GBPUSD: Eventually had a decent rally through 1.2650 after the weaker than expected US data and now finding support at 1.2680-00 helped by better risk GBPJPY demand after failing to make much headway above 1.2730 this time. I remain bearish on the UK and GBP overall. EURGBP: Back down through 0.8580 now amid some general EUR retreat after Schnabel's comments after capping at 0.8600-10 agin with more two-way expected overall as core pairs make their mind up. GBPJPY: Capping at 186.00 this time after holding 185.00 yesterday amid some natural JPY supply. GBP sellers will remain poised as risk remains fragile.
EURUSD: Holding support into 1.0880 as I type after yesterdays's rally capped at 1.0940 and I remain a rally seller.
USDJPY: Capping at 146.50 yesterday and another sharp retreat after the soggy US data before support coming in at 145.60-80 as we continue to range tightly. I remain a rally seller as preferred side overall but with patience a virtue as ever.
More detailed analysis across a variety of pairs and 1-2-1 mentoring sessions for traders from mike@mspfx.co.uk
Interbank rates: 08.38 BST
GBPUSD 1.2711
EURUSD 1.0897
EURGBP 0.8571
GBPEUR 1.1665
USDJPY 145.87
GBPJPY 185.42
GBPCAD 1.7186
GBPCHF 1.1185
GBPZAR 23.7265
GBPHKD 9.8933
USDCHF 0.8800
EURCHF 0.9588
EURHKD 8.4812
AUDUSD 0.6480
NZDUSD 0.5959
USDCAD 1.3540
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