Monday 14 November 2022
There's been some good two-way business in Asia but overall tones have still been seeing the Greenback on the, er, back foot after the biggest two-day losses in over 13 years following Thursday's US CPI data. Declines in 5 of the previous 6 days since the firmer US jobs/wages data, strangely, which has suggested a fundamental shift in USD sentiment after being mostly in demand for 2022. Models have been notable sellers but have we gone far enough for the moment? That's the big question to be answered this week.
Equities, oil and gold all ranging relatively tightly after their strong rallies last week, as are cryptos for the moment albeit still wobbly. China announced some more relaxing oF COVID measures and a boost for the property sector which has helpd to underpin domestic and global markets too. Geopolitical risk remains the elephant in the room but currently markets have their attention elsewhere.
Focus for the Pound this week remains on the Autumn Statement this Thursday with Hunt already warning of spending cuts and tax hikes in a bid to balance the books. The Swiss Franc found some rapid demand on Friday after SNB's Jordan said mon pol hadn't gone far enough yet to combat inflation.
GBPUSD: A solid hold of 1.1700 on Friday provided the platform for another USD-supply rally which has seen a test of 1.1850-60 before retreating again as I type. EURGBP: Underpinned at 0.8730 this time but equally capping at 0.8780 as the jury remains out. I expect the two-way business to continue. Some option interest potentially in play at 0.8800 if we rally. GBPJPY: Holding 163.50 and a strong rally to 165.50 as I type amid the renewed JPY supply helped by USDJPY rally. I would still expect two-way business as markets remain ever-fickle but with sellers to prevail.
EURUSD: A solid hold of 1.0230-50 on Friday and rally to test 1.0370 amid the USD supply but in retreat as I type as some Asian USD demand spills over into European trading again. USDJPY: Capping at 140.50 offers/resistance as I type after holding 138.50. EURJPY: Capping at 145.00 and solid retreat as USDJPY fall outstripped EURUSD rally but now back up to 144.60 from 143.50 as USDJPY rallies and JPY supply returns. USDCHF: Solid cap at 0.9700 and a rapid retreat on the Jordan comments but holding 0.9400 a few times since. SNB will be watching still ofc. EURCHF: Capping into 0.9850 and broke down through 0.9820-40 support post-Jordan but support at 0.9739 area so far albeit with sellers poised 0.9780.
AUDUSD: Formed a base around 0.6650 and a rally to 0.6715 then up again this morning before capping at 0.6705.NZDUSD finally capping at 0.6130 but now in retreat amid the firmer USD tones with support nearby at 0.6050. USDCAD: A solid fall on Friday from 1.3350 amid the softer USD/firmer oil double whammy but holding 1.3250 a few times.
Let's continue to be careful out there.
Interbank rates: 08.48 GMT
GBPUSD 1.1822
EURUSD 1.0339
EURGBP 0.8743
GBPEUR 1.1435
GBPJPY 165.23
GBPCAD 1.5640
GBPCHF 1.1154
GBPZAR 20.2985
GBPHKD 9.1608
USDJPY 139.70
EURJPY 144.50
EURCHF 0.9748
EURHKD 8.0115
AUDUSD 0.6707
NZDUSD 0.6104
USDCAD 1.3257
USDCHF 0.9428
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