1. FX Outlook
  2. Daily FX Report



German unemployment increased 2,000 for February after a 15,000 decline previously, but compared with expectations of a 9,000 increase.  The Euro made headway in early Europe on Wednesday with further support from optimism that a rebound in the Chinese economy would help support Euro-Zone economy. 

German consumer prices increased 0.8% for February with the year-on-year increase unchanged at 8.7% and above consensus forecasts of 8.5%.

The latest Euro-Zone data will be released on Thursday with expectations of a decline to 8.3% from 8.6%, but the whisper number is higher.

Bundesbank President Nagel stated that significant increases in interest rates are necessary beyond the March increase. Markets are pricing around a 65% chance that the ECB will hike by 50 basis points in March with the remainder expecting a 75 basis-point hike.

Hawkish rhetoric provided further Euro support during the day with the single currency posting highs just above 1.0690 against the dollar.

The US currency regained some ground after the New York open and the Euro edged lower, although there was still a strong tone on the major crosses.

Higher yields and weaker equities underpinned the dollar with the Euro held around 1.0640 in early Europe on Thursday amid the defensive risk tone.




The yen posted strong gains into the US open with the dollar dipping to lows around 135.25 against the Japanese currency.

The US ISM manufacturing index increased marginally to 47.7 for February from 47.4 the previous month, but slightly below consensus forecasts of 48.0 and remained in contraction territory for the fourth successive month. New Orders and production also remained in contraction for the month and there was a small decline in employment for the month.  The prices index moved back into positive territory with a reading of 51.3 from 44.5 previously and stronger than expected.

Although the US data was mixed, the prices component caused some concern with Treasuries losing ground and the dollar rebounded strongly to around 136.20.

Minneapolis Fed President Kashkari reiterated inflation concerns and, although he stated that he was open-minded about a 25 or 50 basis-point rate hike in March, he stated that he was leaning towards raising the policy path from December’s level.

Atlanta head Bostic stated that he expects rates will have to increase to 5.00-5.25% and stay there well into 2024. Higher yields continued to underpin the dollar.

Bank of Japan member Takata stated that the central bank must maintain the current massive monetary easing while former Governor Shirakawa called for a re-examination of monetary and frameworks. Higher US yields dominated as the 10-year yield moved above 4.00% for the first time in over three months and the dollar strengthened to 136.60 against the yen. The Euro also strengthened to above 145.00 against the Japanese currency.




The UK manufacturing PMI index was revised marginally higher to 49.3 from the flash reading of 49.2. Mortgage approvals amounted to 39,600 for January compared with expectations of 38,000 while the December figure was revised sharply higher to 40,500 from the previous reading of 35,600.

Net lending increased to £4.1bn from £3.7bn with a surge in consumer credit growth which could indicate distressed borrowing or stronger consumer confidence.

Bank of England Governor Bailey stated that he would advise caution in suggesting that the central bank was done with rate hikes or that further rate hikes were inevitable. He added that some further rate hikes could be appropriate, but nothing is decided and he reiterated that the bank is data dependent in decision making.

There was a slight easing of interest rate expectations following Bailey’s comments which helped undermine Sterling.

The positive impact of the EU-UK faded during the day and the UK currency posted steady losses with significant set selling.

Sterling dipped to lows around 1.1965 before regaining the 1.2000 level while the Euro posted strong gains to highs around 0.8900 before a limited correction.

Higher US yields and weaker equities sapped Sterling support as it traded just below 1.2000 on Thursday with the Euro little changed around 0.8880.




The Swiss PMI manufacturing index edged lower to 48.9 for February from 49.3 previously and below expectations of 50.4. The Swiss franc was vulnerable during the day with higher yields curbing support. The Euro posted a strong advance to just above parity while the dollar settled just below the 0.9400 level. Higher yields sapped franc support on Thursday with the Euro around 1.0030 and the dollar around 0.9430 with any National Bank rhetoric watched closely.

Technical Levels 

Fx Daily Technical Levels 02032023


Fx Daily Calendar 02032023



This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

Sign up to get the latest market insights

We will email you each time a new report has been published.

You might also be interested in...