Friday 15 September 2023
Yesterday the ECB hiked rates by 25bps as had been widely expected in recent days/weeks and we saw some EUR demand initially but that algo-led rally was short lived when the policy statement and Lagarde in the presser made it clear that the hiking cycle was at an end. Cue a Euro retreat across the board. There's been a couple of ECB talking heads this morning saying nothing can be taken for granted and hikes can't be ruled out but that seems against the grain.
The Greenback remains underpinned still as another week closes after some firmer US data yesterday and we wait on the US Fed, BOE and BOJ rate/policy decisions next week while the jury remains out on JPY pairs which have steadied for the moment again amid some firmer risk tones. The RBA has a new Governor today with Michelle Bullock replacing Lowe as planned.
Equities rallied in NY trading after Wednesday's retreat and remain underpinned albeit capping a little this morning while the second-guessing continues. WTI remains underpinned too but capped around $90.50 this time after holding $88.50 then $89.30-50 in yesterday's retreats. Gold still capping at $1915 as equities steady again but finding support around $1905 as I type amid 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: 1.2480-00 providing the cap yesterday and a solid retreat into 1.2400 accelerated by the US data releases but tempered by EURGBP supply and GBPJPY demand. I remain bearish on the UK and GBP overall. Ever-poised for re-sells. EURGBP: Capped around 0.8610 again in the immediate ECB-hike rally but soon in retreat on the rhetoric. Holding 0.8570 so far and more two-way expected overall. GBPJPY: Capped at 184.00 yesterday but holding 182.40 in the extended retreat as GBPUSD outstripped USDJPY rally but we've seen a rally to 183.80 as I type with some better risk JPY supply helping to support. Sellers ever poised as I've been warning.
EURUSD: A hold of 1.0630 since capping into 1.0740 in the immediate ECB rally then retreating on the rhetoric and US data double whammy. Traders pausing for thought/profit-taking and I remain a rally seller overall so I hope the ongoing steer has helped. USDJPY: A good hold of 147.00 again yesterday amid better US data and risk sentiment and remains undderpinned but capping at 147.80 as I type amid fears of MOF/BOJ intervention again. 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: 08.50 BST
GBPUSD 1.2438
EURUSD 1.0664
EURGBP 0.8575
GBPEUR 1.1660
USDJPY 147.76
GBPJPY 183.76
GBPCAD 1.6806
GBPCHF 1.1137
GBPZAR 23.6895
GBPHKD 9.6908
USDCHF 0.8951
EURCHF 0.9545
EURHKD 8.3111
AUDUSD 0.6455
NZDUSD 0.5917
USDCAD 1.3506
Comments