Thursday 21 September 2023
Yesterday the US Fed left interest rates on hold as widely expected but the statement rhetoric and comments from Chairman Powell leaned to the hawkish/cautious side so USD demand still prevailing. Surprise pause this morning from the SNB who left interest rates on hold at 1.75% versus the 25bps hike expected saying that recent hikes were having desired effect on inflation. They left the door open to further tightening in the future but in the here and now of markets we've seen notable CHF supply.
BOE next up the ramp today at 11.00 GMT and the jury very much out on a 25bps rate hike given the softer UK inflation data yesterday. As always we need to see the accompanying direction of travel, vote count and see what the market has already factored in. BOJ rate/policy decision tomorrow also in focus.
US equities fell on the hawkish FOMC tones and steady since in Asia while European markets have seen a bit of a bounce after yesterday's FOMC-led retreat. WTI rallied from yesterday's lows but in retreat again since the FOMC hawkish tones and now $88.40 having capped into $91.00. Gold finding support around $1925-30 still after failing to make headway above $1935 with natural sellers still poised and tight range prevailing. 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: 1.2400-20 providing the cap again yesterday but holding 1.2290-00 so far in the extended retreat posr-FOMC as we wait on the BOE with decent option interest in play today too helping to contain range.Keeping core shorts still and I remain poised for rally re-sells. EURGBP: Holding 0.8620-30 in latest retrest and now testing 0.8660 again on the softer BOE expectations. More two-way expected overall but hanging on BOE. Options in play too now. GBPJPY: Capped at 183.20 again amid softer risk tones but holding 182.25 so far. Sellers ever poised as I've been warning. BOE in focus.
EURUSD: A hold of 1.0620 after another cap into 1.0740 and post-FOMC retreat.I remain a rally seller overall. USDJPY: A good hold of 147.50 yesterday after the initial failure above 148.00 and some pips banked. 148.50 tested this time amid the general USD demand but capping amid ongoing fears of MOF/BOJ intervention. I remain a rally seller as preferred side overall at these elevated levels 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: 08.40 BST
GBPUSD 1.2312
EURUSD 1.0655
EURGBP 0.8652
GBPEUR 1.1558
USDJPY 148.27
GBPJPY 182.57
GBPCAD 1.6605
GBPCHF 1.1162
GBPZAR 23.2650
GBPHKD 9.5817
USDCHF 0.9052
EURCHF 0.9648
EURHKD 8.2901
AUDUSD 0.6413
NZDUSD 0.5918
USDCAD 1.3488
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