1. FX Outlook
  2. Daily FX Report


The Euro was held in tight ranges ahead of Thursday’s New York, but was unable to make any significant headway.

The US Philadelphia Fed manufacturing survey remained in contraction territory for July with a marginal improvement to –13.5 from –13.7 the previous month and compared with expectations of –10.0. There was a further decline in new and unfilled orders for the month with shipments also sliding into contraction territory for the month. Employment also declined slightly on the month.

Price indices were very mixed with prices paid increasing at a slower rate while there was a much stronger reading for prices received.

Companies were more optimistic over the outlook while inflation pressures are expected to increase in the outlook period.

Markets tended to focus on the inflation components within the release and the data reinforced concerns that inflation pressures could be stubborn. With expectations that the Federal Reserve would maintain a hawkish policy stance, the dollar posted net gains.

Euro-Zone consumer confidence improved slightly to –15.1 for July from –16.1 previously and stronger than expectations of –16.0.

The Euro was unable to gain fresh support and gradually lost ground with lows below 1.1120 against the dollar.

The Euro secured only a very limited recovery on Friday and traded around 1.1135 against the dollar as tight ranges prevailed.


US initial jobless claims data declined to 229,000 in the latest week from 237,000 the previous week and below consensus forecasts of 242,000, but there was a significant increase in continuing claims to 1.75mn from 1.72mn.

Treasuries lost ground after the US data with yields moving higher. The 10-year yield moved above 3.80% and there was a fresh dollar advance with gains to near 140.00 against the yen.

US June existing home sales retreated to an annual rate of 4.16mn for June from 4.30mn previously and below consensus forecasts of 4.23mn.

Overall yields continued to move higher and the dollar challenged resistance above the 140.00 level with a peak at 140.50 before a correction to 140.20.

Headline Japanese inflation was slightly weaker than expected at 3.3% from 3.2% previously while underlying inflation was in line with consensus forecasts at 4.2% from 4.3% previously. The data failed to trigger further speculation over a Bank of Japan tightening. China’s foreign exchange regulator continued to warn that it would forcefully prevent sharp volatility in the yen and the dollar consolidated just above the 140.00 level against the yen.


Sterling was unable to sustain a recovery against the dollar on Thursday with no move to challenge the 1.3000 level against the dollar. There was, however, a stabilisation of UK yields during the day with markets still reluctant to back away from calls of a very aggressive Bank of England stance to raise interest rates further.

Sterling dipped to lows below 1.2850 against the dollar, primarily under the influence of a stronger US currency.

The UK currency settled just above 1.2850 against the dollar while the Euro again failed to break above the 0.8700 level and retreated to near 0.8650.

The Conservative Party suffered two heavy by-election defeats, maintaining pressure on Prime Minister Sunak, but managed to hold the Uxbridge seat

The UK GfK consumer confidence index dipped sharply to –30 for July from –24 previously and below expectations of –26.

UK retail sales data was stronger than expected with a 0.7% gain compared with expectations of a 0.2% increase. Sterling advanced to just below the 1.2900 level against the dollar with the Euro retreating to 0.8640 as overall yields moved higher.


The Swiss franc lost some ground on Thursday with higher yields elsewhere tending to undermine support for the Swiss currency. There was also a correction after persistent strength during the week. The Euro recovered to just above the 0.8650 level while the dollar secured a strong recovery to near 0.8675.

The Euro settled close to 0.9650 on Friday with the dollar around 0.8660 as markets monitored global risk and yield trends.

Technical Levels 

Tables 1 (180)



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