1. FX Outlook
  2. Daily FX Report


The Euro was able to find support below the 1.0800 level in early Europe on Monday and quickly moved back above this level. The final Euro-Zone PMI manufacturing index was revised slightly higher to 47.3 from the flash reading of 47.1 and had little impact with the Euro continuing to recover.

The US ISM manufacturing index declined to 46.3 for March from 47.7 previously which was below expectations of 47.5 and the fifth successive reading in contraction territory below the 50.0 level. New orders contracted at a faster pace on the month. Production also remained in contraction for the month while supply pressures continued to ease. Employment continued to decline on the month and at a faster pace than for the previous month.

As far as inflation is concern, there was a fresh decline in the prices index to 49.2 from 51.3 in February.

There were still major uncertainties over Federal Reserve policy with inflation and employment trends crucial. During the day, there was a slight shift in expectations with the chances of a 25 basis-point rate hike for March seen at around 55%.

Overall, there were expectations that the ECB would adopt a more restrictive policy that the Federal Reserve which helped underpin the Euro. In this context, the single currency posted strong gains to highs near 1.0920 before a retreat to 1.0880.

The dollar was unable to make any headway on Tuesday as yields remained at lower levels and the Euro traded just below the 1.0900 level.


The dollar posted highs around 133.70 against the yen in early Europe on Monday before a retreat to below 133.00 around the US open.

St Louis Fed President Bullard stated that the market is focussing too much on banking strains and expects inflation to be sticky, especially with a strong labour market.

He also stated that higher oil prices would make inflation fighting more difficult and reiterated that interest rates need to be increased to above 5.00%.

Treasuries posted strong gains after the US ISM data with the 10-year yield declining sharply to near 3.40% and close to March lows.

Lower yields were important in undermining the dollar with a retreat to lows below 132.30 against the yen.

Markets will remain on alert for comments from Federal Reserve officials while the latest US jobs data on Friday will be an important focus.

Conditions were relatively calm in Asia on Tuesday with the dollar securing a limited net recovery to around 132.75 after hitting resistance close to 133.00.


The final UK PMI manufacturing index was revised marginally lower to 47.9 from the flash reading of 48.0.  Overall domestic influences remained limited during the day with markets focussing on global developments.  Sterling managed to find support below 1.2300 against the dollar in early Europe on Monday and gradually regained ground as the US currency was subjected to fresh selling pressure. There were also doubts that the Bank of England would be able to relax on monetary policy.

As equities made headway, there were gains to highs around 1.2420 against the dollar before a retreat to just below 1.2400 while the Euro settled around 0.8785 after failing to hold above 0.8800. Sterling held a firm tone on Tuesday with the currency underpinned by expectations of gains on seasonal grounds during April.

The UK currency traded just above 1.2400 against the dollar on Tuesday with the Euro around 0.8780 as risk appetite held steady.


Swiss consumer prices increased 0.2% for March compared with expectations of 0.4% and the year-on-year rate declined more than expected to 2.9% from 3.4% and below consensus forecasts of 3.2%. The data will offer limited reassurance to the National Bank over inflation trends.

Bank member Schlegel, however, stated that there will be further increases in interest rates if necessary.

The Swiss PMI index declined further to 47.0 in March from 48.9 previously and compared with expectations of no change.

Swiss sight deposits declined to CHF563.6bn in the latest week from CHF567bn the previous week which suggests that liquidity in Swiss money markets had eased with reduced funding requirements for Credit Suisse and UBS.

The franc overall tended to drift with the Euro strengthening to 0.9945 while the dollar dipped to 0.9115 before a recovery to 0.9135.

Technical Levels 

Tables 1 (112)

Economic Calendar

Fx Daily Calendar 04042023



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...