Thursday 7 September 2023
We've seen more USD demand in the past 24 hours amid some decent US data, but also EUR buying after ECB's Knot suggested more hikes to come. BOE's Bailey and others on the MPC seemed less concerned about UK inflation though and GBP came in for another push lower.
The Bank of Canada duly left interest rates on hold at 5% with little change in rhetoric but slightly more hawkish than some had expected providing CAD volatility in the immediate aftermath. Pressure still on the Chinese Yuan despite intervention giving cause for concern still.
Equities remain on the back foot but off their lows by and large while WTI capped around $87.50 again and in retreat to $86.50 as I type. Gold finding support around $1915 this time after capping above the previous $1925 lows as the jury remains out and tight ranges prevail. 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: Capping at 1.2550 then 1.2520 yesterday and we've seen a retreat into 1.2460 amid the USD demand and dovish BOE tones. I remain bearish on the UK and GBP overall. EURGBP: Holding 0.8550 and a rally through the the 0.8580-85 pivot thid morning after yesterday's BOE/ECB comments disparity. More two-way expected overall as core pairs make their mind up but should stay underpinned on CB expectation. GBPJPY: Capped at 185.20 yesterday and a decent retreat to 183.80 as I type amid the general GBP supply and USDJPY capping plus some softer risk tones.Sellers ever poised as risk remains fragile as I've been warning.
EURUSD: A hold of 1.0700 again yesterday after capping at 1.0740-50 where we had that large option interest. The ECB comment-led rally failing at 1.0730. I remain a rally seller. Option interest at 1.0700 expected to help support again. USDJPY: Holding 147.10 yesterday but capping around 147.80 again amid intervention fears and softer risk JPY demand. I remain a rally seller as preferred side overall 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: 08.43 BST
GBPUSD 1.2475
EURUSD 1.0715
EURGBP 0.8589
GBPEUR 1.1640
USDJPY 147.43
GBPJPY 183.87
GBPCAD 1.7035
GBPCHF 1.1120
GBPZAR 24.0060
GBPHKD 9.7141
USDCHF 0.8917
EURCHF 0.9554
EURHKD 8.3454
AUDUSD 0.6388
NZDUSD 0.5887
USDCAD 1.3638
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