Friday 12 January 2024
Yesterday's US CPI data came in stronger than some expected and we saw USD demand in the immediate aftermath with USDJPY clearing out offers at 146.00 but main focus since has been the US/UK-led attacks on Houthi targets in retaliation for the Red Sea shipping attacks. Some USD supply returning amid softer risk JPY demand but all ranging still for the moment. This morning's UK GDP data came in a little better than expected which will give the BOE some cause for consideration on rate cut timing but economy still sluggish on the consumer side.
Meanwhile the Ukraine/Russia war and the Red Sea disruptions/fallout continue to grab headlines while the ongoing Middle East Israel/Hamas back-story casts its own shadow over markets and yet, imnho, to reveal its full impact.
Equities fell then rallied and capped amid the variable/fragile risk tones but with the jury still out on the speed of cuts by FOMC et al but underpinned still for the moment. WTI found support at $71.80 again and rallied to test $74.00 amid the Red Sea events as I've been warning here for a while now and currently holding $73.50 but with sellers poised still. Gold ranging tightly still now between $2015-40 for the moment as the jury remains out.
GBPUSD: Capping around 1.2780 again but holding 1.2700 in the retreat post-CPI yesterday amid the USD demand before bouncing to test 1.2780 again. GBPJPY supply helping to cap. I remain poised for further sells when momentum fades but patience still required. EURGBP: Still capping at 0.8620 and testing 0.8590 in the latest retreat as the CB jury remains out. GBPJPY: Better risk tones saw the pair rally to 186.20 but trading lower into 185.00 since the Red Sea interventions on the softer risk appetite. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets but still underpinned for the moment.
EURUSD: Support coming in at 1.0930 again yesterday but equally a capping at 1.0990 as the jury stays out on risk and CBs. I remain a rally seller. USDJPY: Finding support between 144.80-00 again in the retreat from 146.40 that we saw in the immediate CPI aftermath and re-sells duly placed per my tweet at the time. I remain a rally seller as preferred side overall but caution/patience still required for the moment.
For more detailed analysis across a variety of pairs email mike@mspfx.co.uk
Interbank rates: 08.48 GMT
GBPUSD 1.2773
EURUSD 1.0979
EURGBP 0.8595
GBPEUR 1.1634
USDJPY 145.00
GBPJPY 185.23
GBPCAD 1.7047
GBPCHF 1.0887
GBPZAR 23.7383
GBPHKD 9.9478
USDCHF 0.8517
EURCHF 0.9350
EURHKD 8.5485
AUDUSD 0.6710
NZDUSD 0.6250
USDCAD 1.3352
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