Thursday 3 March 2022
Mixed US Dollar and risk tones notable in the past 24 hours but some firmer risk sentiment emeging yesterday with JPY and CHF supply returning with cross and core pairs rallying in this ever-fickle market. The Euro is still feeling some particular local geographical pressure, as I highlighted yesterday, amid sales of European asset classes fearing Russian ties exposing a very fragile core not least of which the EU need of oil and gas too as well as exposure to Russian banks.Reduced expectations of ECB rate hikes also in the mix. Ukraine/Russia peace talks today in theory but what they might achieve is limited at this time.
Gold and Oil remain underpinned but $1950 still providing a decent cap while Brent marches higher posting fresh highs of $119.10 and WTI $114.90. Meanwhile conjecture over Central Bank rate hikes continues particularly now in these increasingly fragile times and ongoing inflationary price rises in oil. Fed's Powell yesterday gave a mixed bag of views unsurprisingly given the current backdrop but noted that a 0.25% hike in March was "appropriate" and not ruling out a 0.5% hike at future meetings but will "proceed carefully".
GBPUSD: A decent reversal in the past 24 hours has seen a break back up through 1.3350-60 amid some better risk tones bringing GBJPY demand and renewed EURGBP supply. Failure at 1.3420-25 now sees 1.3375 as I type.
EURGBP: Yesterday I warned "Euro pressure may yet provide a clean break lower but rally sellers will remain poised regardless" and so it proved. Support around 0.8320 finally broke and we saw a hold of 0.8300 for a while before breaking lower and helping to underpin GBPUSD further. Further pressure expected in current scenario.
GBPJPY: Finding support at 154.00 amid firmer risk but failing at 155.25 and retreating as I type. Caution still required atm amid Ukraine uncertainty.
EURUSD: The general EUR weakness continues but we've seen some good two-way moves on this core pair between 1.1060-1.1120 amid mixed USD and risk tones in past 24 hours. USDJPY: Support coming in at 115.50 amid the general USD demand and some firmer risk but the jury remains out.EURJPY: A good hold 127.30 yesterday but sellers always poised and this time eventually capping at 128.60 in these ever fickle times amid the Euro generally remain fragile. USDCHF: Sellers still poised amid the fragile backdrop and this time capping at 0.9240 as EURCHF rally runs out of puff. Current support line 0.9180 again and SNB will be keeping a close eye as always but will judge their time as market forces prevail.EURCHF: A good hold of 1.0150-60 yesteday and a decent rally amid some better risk tones but capped a 1.0250 as EUR sellers prevailed here and on EURUSD. SNB still keeping a close watch but can't hold out against combined market forces.
AUDUSD: Finally a break of the 0.7280-00 resistance amid AUDJPY demand ands general commodity ccy support but failing at 0.7320 helped by some firmer USD tones.USDCAD: A rally failure yesterday at 1.2720 and we've tested 1.2580 in the wake of a 0.25% rate hike by BOC helped by commodity ccy and CADJPY demand with oil prices surging further.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.30 GMT
GBPUSD 1.3390
EURUSD 1.1091
EURGBP 0.8282
GBPEUR 1.2072
GBPJPY 154.93
GBPCAD 1.6885
GBPCHF 1.2308
GBPZAR 20.4854
GBPHKD 10.4308
USDJPY 115.71
EURJPY 128.33
EURCHF 1.0200
EURHKD 8.6405
AUDUSD 0.7304
USDCAD 1.2611
USDCHF 0.9195
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