1. FX Outlook
  2. Daily FX Report


The Spanish inflation rate declined sharply to 3.2% from 4.1% and well below expectations of 4.4%, maintaining the possibility of a wider Euro-Zone inflation retreat.

The Euro came under pressure after the European open and dipped to 9-week lows below 1.0700 against the dollar.

The Euro-Zone industrial sentiment index dipped to –5.2 for May from –2.8 previously while the services-sector index also retreated to 7.0 from 9.9 with both figures well below market expectations. The overall business and consumer survey index retreated to 96.5 from 99.0 and also below expectations.

Although the data was weaker than expected and maintained concerns over the outlook, the Euro quickly moved back above the 1.0700 level.

US consumer confidence retreated to 102.3 for May from 103.7 in April, although there was a significant upward revision to the April reading from 101.3 and the may figure was above expectations of 99.0. There was only a slight decline in the expectations index as it remained below the key level of 80 and in recession territory. Confidence in the labour market deteriorated, although confidence in incomes and wages held firm.

The dollar gained some ground after the data, but the Euro resisted selling pressure as US yields edged lower.

There will be further choppy trading on Wednesday due to month-end position adjustment. There will also be a vote on the debt-ceiling deal in the House of Representatives. The Euro settled just below 1.0700 on Wednesday as the dollar secured a tentative fresh advance in global markets.


The dollar dipped lower against the yen just after Tuesday’s European open with the announcement of an emergency meeting by Japanese authorities.

Japanese top currency diplomat Kanda stated that officials are watching forex moves closely and it was important for currencies to move stably reflecting economic fundamentals. He did, however, add that he was not focussing on any specific currency levels. These comments were milder than feared and triggered a fresh dollar surge with a second peak around 130.90. There was, however, a renewed reversal ahead of the New York open with the US currency dipping below the 140.00 level.

Manufacturing data remained weak with the Dallas Fed manufacturing index sliding to a 3-year low of –29.1 for May from –23.4 previously.

Despite a blip higher after the consumer confidence data, the dollar was unable to regain momentum.

Cleveland Fed President Mester maintained a hawkish stance and stated that there was no compelling reason to wait on rate hikes. Richmond head Barkin stated that the outlook for rates is mixed with evidence of slowing demand offset by the fact that businesses are still trying to increase prices.

Chinese PMI data was weaker than expected with the manufacturing index edging lower to 48.8 from 49.2 while the non-manufacturing index declined to 54.5 from 56.4. The data helped maintain a cautious stance towards risk with the yuan weaker, but the dollar was held just below the 140.00 level and dipped to near 139.50.


Sterling held steady as UK markets re-opened on Tuesday and there were significant gains into the US open. After finding solid support below 1.2350 against the dollar, there was a solid advance to above 1.24. There was a significant element of position adjustment which will again be a feature on Wednesday.

There were no significant domestic developments with Sterling continuing to gain net support from expectations of further Bank of England rate hikes.

There was also an element of position adjustment with the UK currency hitting highs near 1.2450 before a correction.

The latest Lloyds Bank business confidence data retreated for May, the first decline for three months. Overall confidence in the global outlook also remained fragile which limited the scope for further Sterling buying. The UK currency traded just below 1.2400 against the dollar with the Euro remaining weak just above 0.8630.


Swiss GDP increased 0.3% for the first quarter of 2023 compared with expectations of 0.1%, although the year-on-year rate met expectations at 0.6%. The KOF business confidence index dipped sharply to 90.2 for May from a revised 96.1 previously and well below consensus forecasts of 95.0.

Swiss sight deposits increased slightly to CHF516.7bn from CHF515.7bn the previous week which suggests that the National Bank may have decided that liquidity conditions have tightened enough. The Euro attempted a correction, but was held below the 0.9700 level while the dollar was held below 0.9050.

The franc lost some ground on Wednesday with the Euro just above the 0.9700 level and the dollar around 0.9085.

Technical Levels 

Tables 1 (146)

Economic Calendar

Fx Daily Calendar 31052023



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...