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

Daily FX Report

Read disclaimer


The Euro-zone PMI manufacturing index recovered to 39.5 for May from 33.4 previously and above consensus forecasts of 38.0 while the services-sector index strengthened to 28.7 from 12.0 previously. Expectations for the next 12 months recovered for a second successive month, but employment continued to decline and prices charged declined at the fastest rate since October 2009. The data maintained expectations of slow and tentative recovery as lockdown measures are eased gradually. The Euro maintained a firm tone ahead of the New York open and tested the 1.1000 area against the dollar as markets expected Euro-zone fiscal support.

US initial jobless claims declined to 2.44mn for the latest week from 2.69mn the previous week, although this was above consensus forecasts of 2.40mn.

The Philadelphia Fed manufacturing index improved to -43.1 from May from -56.6 previously, also slightly weaker than market expectations. The new orders index recovered to -25.7 from -70.9 as 25% of companies reported increased orders compared with zero last month, but unfilled orders declined at a slightly faster pace. Employment declined at a slower pace on the month while prices paid declined slightly. Companies were more optimistic over the 6-month outlook.

The US PMI manufacturing index recovered to 39.8 from 36.1 previously with the services-sector index at 36.9 from 26.7. The data overall maintained expectations of a slow economic recovery. The dollar recovered some ground following the data with the Euro failure to hold above 1.1000 also a negative factor for the single currency. The US currency gained a renewed element of defensive support on Friday and the Euro retreated to the 1.0920 area as commodity currencies lost ground.


The dollar was again confined to narrow ranges ahead of the New York open with consolidation around the 107.70 area while the overall reaction to the US data was limited. San Francisco Fed President Williams stated that the Federal Reserve had looked at negative interest rates and the view is that it is not the right tool to use at the moment. There was a more defensive tone surrounding risk appetite in New York, but ranges remained narrow as both the yen and dollar gained an element of defensive support. The Bank of Japan held interest rates at -0.1% following the latest policy meeting with the target range for 10-year bonds at 0.0%. The bank decided on details of the new loan scheme aimed at boosting lending to small and medium-sized companies.

Overall risk appetite remained more fragile during Friday with China’s move to impose new security laws on Hong Kong liable to attract further criticism from the US and increase bilateral tensions.  China also decided against setting a growth target for this year which maintained unease over the underlying growth outlook. Equities moved lower and oil prices also declined sharply which triggered fresh yen demand and the dollar retreated to the 107.40 area, although ranges were still relatively contained.   


According to flash data, the UK PMI manufacturing index recovered to 40.6 for May from 32.6 previously and above consensus expectations of 32.6 while the services-sector index advanced to 27.8 from 13.4 in April. These releases were still the second-lowest on record and indicated steep contraction. There was an element of optimism that the economic trough had been seen in April, but here were further important concerns that there would be a very slow recovery.

The UK CBI industrial trends orders index declined to -62 for May from -56 previously and below consensus expectations. Output in the latest three-month period also dipped at the fastest pace since the survey started in 1975 with exports orders declining sharply and companies expect a further output slide for the next three months.  

UK yields declined further during the day with the 2-year yields declining to -0.05%, further undermining support, as speculation over negative interest rates persisted. The Euro did hit selling interest close to 0.9000 and retreated to near 0.8950 while Sterling was unable to make headway against the dollar as it retreated to near 1.2200. UK retail sales declined 18.1% for April compared with expectations of 16.0% with a 22.6% annual decline. Underlying sales declined 15.3% on the month, close to consensus forecasts. The government budget deficit increased very sharply to £61.4bn for April, close to the 2019/20 total, but the initial Sterling reaction was limited. 


The Swiss franc lost ground ahead of the New York open with the Euro strengthening to around 1.0650. The single currency was, however, unable to hold the gains and retreated to 1.0610 amid a wider retreat with the National Bank’s willingness to defend the 1.0500 area still an open debate within markets. The dollar pushed to highs just above 0.9700 before stalling. Overall defensive demand for the franc remained slightly lower, although selling also remained limited. The Euro was able to hold above the 1.0600 level on Friday despite the weaker tone surrounding risk appetite with the dollar holding above the 0.9700 level.




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.