1. FX Outlook
  2. Daily FX Report



The German ZEW investor confidence index improved slightly to –12.3 for August from –14.7 previously and also slightly stronger than consensus forecasts. There was, however, a further net deterioration in the current conditions component for the month, maintaining underlying unease over the outlook.

The Euro overall was held in tight ranges ahead of the New York open.

US retail sales increased 0.7% for July after a revised 0.4% decline the previous month and above expectations of 0.4%. Underlying sales increased 1.0% for the month and well above market expectations of a 0.3% decline while the control group also posted a 1.0% gain on the month after a 0.5% gain previously.

The New York Empire manufacturing index slumped to –19 for August from 1.1 previously and substantially weaker than the expected figure of –1.

There were also sharp contractions in production and new orders for the month with unfilled orders also in contraction territory.

There was also a net employment decline for the month, but inflation pressures increased with a net increase for prices paid and prices received.

Companies were more optimistic over the outlook while pricing pressures are expected to be mixed.

The data releases overall were, therefore, mixed, although a significant element was a fresh decline in equities which provided an element of defensive dollar support and also undermined the single currency. The Euro still managed to secure a tentative advance to 1.0930 before drifting back to 1.0900 as equites remained under pressure. The Euro held just above 1.0900 on Wednesday as tight ranges prevailed.




The dollar held a firm tone after Tuesday’s European and posted fresh 9-year highs at 145.85. The dollar also spiked in immediate response to the retail sales data, but failed to hold the gains amid the weak New York Empire survey.

Treasuries pared losses following the data and the dollar retreated from highs, although there was support above the 145.00 level.

The US NAHB housing index declined to 50 for August from 55 previously and below expectations of 56 with high bond yields sapping overall sentiment.

There were no comments from Federal Reserve officials into the European close.

Markets remained wary over potential Ministry of Finance verbal intervention through the Bank of Japan.

The Japanese Tankan business confidence data reported an improvement in manufacturing and non-manufacturing confidence, although there were still reservations over Chinese demand. There was no rhetoric from the Bank of Japan with the dollar holding just below 145.50 on Wednesday.




Sterling held a firm tone after the UK wages data amid expectations that the Bank of England would have to be more aggressive in hiking interest rates. There was fresh speculation over peak rates at 6.00%, although overall moves were relatively constrained, especially with risk conditions still broadly cautious. There was also inevitable caution ahead of the latest UK inflation release.

Sterling dipped to lows around 1.2675 against the dollar, although it absorbed selling pressure and moved back above 1.2700 as the dollar failed to hold intra-day highs.

The Euro posted net losses to 2- week lows just above 0.8580.

The headline UK inflation rate declined sharply to 6.8% from 7.9% which was in line with expectations as retail energy prices fell sharply. The core rate held at 6.9% and marginally above expectations of 6.8%. The overall impact was muted with Sterling trading just above 1.2700 against the dollar with the Euro just below 0.8590. 




The Swiss franc was held in relatively narrow ranges on Tuesday with lacklustre trading volumes curbing activity. The Euro settled around 0.9585 with the dollar unchanged around 0.8770 after failing to hold the 0.8800 level.

There was little net change on Wednesday with the dollar holding around 0.8780 as markets continued to monitor global risk conditions.

Technical Levels 

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Fx Daily Calendar 16082023X



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