Tuesday 2 May 2023
Been away until late last night so still playing a little catch-up but it appears that risk appetite is mostly underpinned atm, USD mixed with USDJPY still heading higher with the accompanying GBPJPY demand putting a base under GBPUSD as I type after Friday's spurt higher to 1.2580.
Story of the morning though is the Reserve Bank of Australia's surprise hike of 25bps and not ruling out further hikes contrary to recent dovish talk. CBs eh? Just can't trust them as they continue to stick wet fingers in the air. AUD has ralllied but large option contract interest 0.6700-15 helping to cap atm.
Equities are off their highs this morning as I type but WTI is capping at $76.50 now as the recesssion fear-led wobble continues but holding $74.50 in latest retreats.Gold continues to trade tightly within a $1975-2005 range amid the fragile risk tones but with talk of CB selling to cover debts elsewhere capping rallies. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China/Taiwan tensions in the mix too and now ongoing Middle East tensions and turmoil in Sudan escalating.
GBPUSD: A cap at 1.2580 on Friday and 1.2520 this morning but a good hold of 1.2460 so far helped by ongoing GBPJPY demand . I remain a rally-seller on this pair overall. EURGBP: Capping into 0.8840 and now 0.8800 as the GBPJPY demand filters through GBP pairs and the month-end EUR demand no longer in play.Holding 0.8760.Expect more two-way business still overall. GBPJPY: Up up and away since the BOJ decision and forming a base now at 171.00 but capping into 172.30 as GBPUSD retreats.
EURUSD: Capping at the pivotal 1.1030-40 area but holding 1.0960 in the retreats so far where we also have option interest today. More at 1.0990-00. I remain a rally seller as my preferred side overall but equally a case for buying dips still as we continue to range. ECB conjecture continues. USDJPY: There's no stopping this pair's rally atm as the post-BOJ JPY selling continues and I'm happy to sit this out for the moment and focus on other pairs. I've had a good run selling rallies overall this year but not jumping back in atm.
Interbank rates: 08.45 BST
GBPUSD 1.2476
EURUSD 1.0971
EURGBP 0.8793
GBPEUR 1.1370
USDJPY 137.56
GBPJPY 171.62
GBPCAD 1.6923
GBPCHF 1.1202
GBPZAR 22.9288
GBPHKD 9.7219
USDCHF 0.8984
EURCHF 0.9857
EURHKD 8.5505
AUDUSD 0.6700
NZDUSD 0.6190
USDCAD 1.3561
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