Tuesday 15 November 2022
Yesterday I noted again that models have been notable USD sellers in the past week or so since US NFP data and asked whether we had gone far enough for the moment in the light of some demand returning. Well, we have our answer so far this morning as USDJPY retreats to 139.20 from yesterday's failure at 140.80, Fed Brainard's dovish tones seemingly negating the more hawkish tones from Waller on Sunday night. EURUSD is up through 4-month highs of 1.0400 and even the beleagured Pound has found enough USD supply to see GBPUSD back up testing recent highs into 1.1850 after yesterday's good hold of 1.1700. AUDUSD up to 0.6764, levels not seen for two months.
Equities, oil and gold still ranging relatively tightly but underpinned again and even cryptos are finding some dip demand for the moment. 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 an expected austerity package amid recession and that continues to wigh on the Pound. As ever the devil will be in the detail. UK jobs data this morning had some positives if you look hard enough but lagging real wages growth remains the key concern. Tomorrow sees BOE governor Bailey and others from the MPC testify before the Treasury Select Committee which also carries a risk for those with GBP exposure.
GBPUSD: A wobble day yesterday which saw a retreat to test 1.1700 amid some GBP supply on the crosses too. We've seen USD-supply since to test 1.1850-60 again but rally tempered by GBP supply on the crosses still. EURGBP: Underpinned at 0.8760 this time and a solid rise through 0.8780-00 resistance to post 0.8822 before retreating back to 0.8760 only to rally again this morning as GBP supply returns and EURUSD breaks up through 1.0400. GBPJPY: Holding 164.25 in yesterday's dip but eqully capping aropund 165.50 helped by USDJPY retreat outstripping GBPUSD rally.
EURUSD: A solid hold of 1.0300 then 1.0350 as the USD supply returned and now up through 1.0400 but failing at 1.0420 so far. Cross flows, risk, Ukraine all in the frame as well as USD flows. USDJPY: Capping at 140.80 yesterday we've seen a test of 139.20 so far. EURJPY: Capping at 145.30 this time after the better-risk rally from 144.25. USDCHF: Tightly bound and now capping at 0.9460 as the USD supply returns but holding 0.9400 still wih EURCHF also holding 0.9740-50.Sellers poised but SNB will be watching. EURCHF: Support at 0.97340-50 area so far with SNB watching and helped by better-risk CHF supply.
AUDUSD: Formed a base around 0.6680 yesterday and a rally to 0.6764 on the softer USD tones but a small retreat as I type. NZDUSD capping for the moment at 0.6160 after a solid rally from 0.6080 amid the softer USD tones. USDCAD: Another solid hold of 1.3250 after the USD supply/firmer oil retreat but equally capping 1.3330.
Interbank rates: 08.18 GMT
GBPUSD 1.1834
EURUSD 1.0416
EURGBP 0.8800
GBPEUR 1.1363
GBPJPY 165.00
GBPCAD 1.5698
GBPCHF 1.1125
GBPZAR 20.3678
GBPHKD 9.2156
USDJPY 139.38
EURJPY 145.18
EURCHF 0.9788
EURHKD 8.1087
AUDUSD 0.6756
NZDUSD 0.6153
USDCAD 1.3256
USDCHF 0.9400
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