Friday 19 January 2024
Another mixed 24 hours as better than expected US weekly jobless data gave the Greenback a small boost but then repeat comments from US Fed-head voter/dove Bostic and then WSJ Fed-watcher Timiraos pointing to downside impact of PCE offered up a more dovish tone. In Asia headlines from Japan's Fin Min Suzuki around closely watching FX levels saw USDJPY briefly head lower before finding dip demand per the trend all week. Currency pairs and markets in general still in second-guessing mode and ranging amid the fragile geopolitical backstory and Central Bank hot air.
UK retail sales data came in rather soggy this morning and gave GBP buyers a timely reminder that all is not good in the UK economy and inflation pressures continue to impact. Meanwhile the Ukraine/Russia war and increasing Middle East Israel/Hamas back-story casts its own shadow over markets and still to reveal its full impact yet as I've been warning for a long time now. CB heads continue to speak from Davos and today brings US Michigan Sentiment data.
Equities traded mixed in NY but ending with a rally and still underpinned as I type. WTI fell again but held $72.00 this time but capping at $74.25 with sellers poised still despite Red Sea developments. Gold held $2000 and dip buyers have finally prevailed amid the fragile risk tones to test $2030 again as I type.
GBPUSD: Capping at 1.2700-20 still amid the general USD demand but holding 1.2650 where we have large option contract interest rolling off today. I remain poised for further sells when momentum fades but patience still required.EURGBP: Capping at 0.8590 but holding 0.8555 in yesterday's retreats as the CB jury remains out. GBPJPY: Underpinned still overall but capping this time into 189.00 helped by the Suziki comments and soggy UK Retails after breaking up through 188.00 and now back below that line.
EURUSD: Support coming in at 1.0860 in this morning's retreat and climbing back up to 1.0885-90 resistance amid some USD supply as the jury stays out on risk and CB comments. I remain a rally seller. USDJPY: Finding support between 147.80-90 but capping at 148.80 and heading lower on the Suzuki comments this morning. Underpinned still but the higher we go the more the MOF/BOJ will be interested.
For more detailed analysis across a larger number of FX pairs email mike@mspfx.co.uk
Interbank rates: 08.42 GMT
GBPUSD 1.2675
EURUSD 1.0873
EURGBP 0.8577
GBPEUR 1.1656
USDJPY 148.20
GBPJPY 187.83
GBPCHF 1.1016
GBPZAR 24.0600
GBPHKD 9.8698
USDCHF 0.8687
EURCHF 0.9446
EURHKD 8.4676
AUDUSD 0.6583
NZDUSD 0.6106
USDCAD 1.3482
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