1. Reports
  2. Daily FX Report
Non-independent Research

Daily FX Report

Read disclaimer


During the European session there were reports of difficulties in trading in the Italian bond market due to a lack of liquidity. There were also reports that the ECB could be given increased scope for asset purchases, but market tensions remained very high.

US housing starts declined to an annualised rate of 1.60mn from 1.62mn the previous month, although this was above consensus forecasts while building permits declined to 1.46mn from 1.55mn. Data releases had no impact, but jobless claims data on Thursday will be monitored closely.

Although global central banks have continued to inject liquidity into money markets, overall demands have continued to support the US dollar as funds looked to raise cash. The dollar remains by far the most liquid global currency which continued to drive strong demand.

Volatility surged again late in Europe with the US dollar continuing to gain very strong support with a push to 3-year highs and the Euro declined sharply. Commodity-related currencies also remained under very heavy pressure with the Australian dollar at fresh 17-year lows. As pressure intensified, the Euro dipped to lows at 1.0800 before a recovery to 1.0900. After an emergency meeting, the ECB announced additional asset purchases of EUR750bn until the end of 2020. The Euro rallied to near 1.0980 in an immediate reaction before retreating to near 1.0900 as the US dollar maintained an extremely strong tone. Commodity currencies slid to fresh record lows before a tentative correction with volatility inevitably remaining extremely high in the short term.


Global equity markets remained under pressure ahead of the New York open, but wider dollar demand continued to dominate. US Treasury Secretary Mnuchin stated that parts of the economy are being closed down to destroy the coronavirus. The US will provide whatever economic aid is needed to support the economy and an injection is being planned into the exchange stabilisation fund. President Trump signed a second relief package, while negotiations within Congress to provide a wider stimulus package continued amid a lack of consensus.

Democrat Presidential candidate Sanders stated that he would assess his campaign with expectations that he would withdraw.

Given the surge in volatility, there will be speculation that G7 will intervene in currency markets to provide an element of stability. US bond yields continued to move higher which helped underpin the US currency. The dollar pushed to highs just above 108.50 before a limited correction as underlying US demand continued. Global equity markets moved lower in Asia, but the dollar continued to gain underlying strength with highs around 109.50 before a correction to below 109.00.


Sterling remained under heavy pressure on Wednesday amid fears over the domestic and global growth outlook. Wider dollar strength was also a key element undermining the UK currency. New Bank of England Governor Bailey stated that the bank was watching Sterling developments closely and that the moves would be taken account of at next week’s policy meeting. He reiterated that negative interest rates in the UK would likely hurt lending. Bailey also stated that large companies had found it more difficult to operate over the last week and he also implored companies not to lay-off workers before consulting with the government and central bank.

Ahead of the New York open, there were reports that restrictions would be imposed on traffic in and out of London with tight restrictions on the opening of retail outlets.
Overall confidence in the UK outlook remained extremely fragile amid fears over a deep recession while a sharp global downturn was also a key element undermining the UK currency, especially with oil prices continuing to slide. The UK currency collapsed further late in Europe with 25-year lows below 1.1500 against the dollar while the Euro the strengthened to a high above 0.9350. Selling continued on Thursday with the Euro strengthening to 11-year highs near 0.9500 while Sterling traded below 1.1600 against the dollar with further very sharp moves again likely during the day.


The Euro lost ground against the franc on Wednesday, although losses were relatively contained given the very sharp wider losses for the single currency. The pair consolidated around 1.0530 while the dollar pushed sharply higher with a move to 3-week highs in the 0.9750 area.

Traditional defensive currencies struggled to gain significant support despite losses in global equites with gold also posting sharp losses as liquidation pressures continued. The Euro edged above 1.0550 late in the European session with little change on Thursday with the dollar around 0.9650 ahead of the National Bank policy announcement. Consensus forecasts are for no change in rates, but other measures may be introduced.



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 Non-independent research

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

You might also be interested in...

Daily Report Base Metals

Our daily commentary, covering market news and closing prices of LME aluminium, copper, lead, nickel, tin, zinc, iron ore, steel, and precious metals.

Daily Report Softs Technical Charts

Technical analysis and charts for the key sugar, cocoa and coffee contracts.

Weekly Report FX Options

Commentary and analysis covering OTC currency option pricing, volatility and positioning. This week we focus on USDSGD and whether the SDG recent strength is sustainable given the deteriorating global outlook. 

Quarterly Metals Report – Q3 2022

Our analysts provide an in-depth analysis of the metals market and current macroeconomic conditions. The environment has weakened significantly as growth fears rise amid persistent high inflation. Central banks are data-dependent, which could mean they slow rate hikes as growth starts to slow. This has meant a downside to the US 10yr yield, but also we see a downside to rate hikes in Q4. Europe will likely enter a recession before the US and take longer to recover, but material availability is significantly lower, shown by low inventories.

FX Monthly Report June 2022

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we look into the JPY and the pressure the BOJ is under to change their monetary policy as JPY continues to weaken against major currencies. Economic data is weakening and inflation is less of a problem in Japan, but yields continue to test the cap.