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

Daily FX Report

Read disclaimer


Ahead of Tuesday’s New York open, there were reports that the ECB has drafted contingency plans to continue its bond-buying programme without the Bundesbank if necessary, although sources indicated that they also thought an outright ban would be unthinkable and Euro sentiment held steady.

The dollar remained firmly on the defensive ahead of the New York open with a fresh surge in risk appetite undermining defensive demand for the US currency. In this environment, the Euro pushed above 1.0950 as commodity currencies secured strong gains.

The US Chicago Fed National Activity index plunged to -16.7 for April from -5.0 for March, a record low for the index by a substantial margin. The Philly Fed non-manufacturing index recovered to -41.4 for May from the extreme reading of -82.5 for April, although this was still the second-lowest reading on record. New orders declined at a slower pace while companies were notably more optimistic over the outlook.

US consumer confidence recovered slightly to 86.6 for May from 85.7 in April, although this was slightly below consensus forecasts. There was a further slide in the current conditions index offset by a recovery in expectations. New home sales data was much stronger than expected at 623,000 from 619,000 previously.

The dollar overall remained on the defensive as risk appetite held firm and the Euro pushed to highs just below the 1.1000 level. The US currency was able to stage a limited recovery on Wednesday amid Chinese tensions with the Euro just above 1.0950.  Markets will monitor EU Commission recovery-fund plans later on Wednesday with the Euro vulnerable if there is evidence of further divisions on fiscal policy while a unified stance and positive rhetoric would underpin single-currency sentiment.


The dollar and yen both lost ground ahead of Tuesday’s New York open with strength in risk appetite undermining demand for both currencies. The US currency still recorded slight net losses and edged lower to just below 107.50 later in US trading as equities retreated from their best levels. There was increased speculation that the Federal Reserve would adopt a yield-control policy later this year to keep bond yields down rather than having a commitment to a specific amount of purchases.

Media reports suggested that Japan’s new fiscal support package would amount to JPY117trn. There were fresh concerns over US-China tensions during Wednesday’s Asian session following reports that China was planning to expand the scope of security legislation. The US Administration has stated that there will be an announcement on potential sanctions later this week. The Chinese yuan weakened and risk conditions were more fragile, although equity futures traded in positive territory and the dollar was held close to 107.50 as the Japanese yen gained fresh support on the major crosses. 


The UK CBI retail sales index recovered slightly to -50 for May from -55 the previous month with most of the improvement due to increased demand within the grocery sector. Import penetration declined sharply on the month while pricing pressures remained weak and investment plans were scaled back.

In comments on Tuesday, Bank of England chief economist Haldane commented that negative interest rates were a policy option under review with an assessment of the potential impact on the financial sector and policy effectiveness. He reiterated, however, that the bank was not remotely close to a decision. He also stated that some recent data had been slightly better than the bank’s central scenario, but that the recovery would be slow with pre-covid output levels not expected to be seen until the end of 2021. Markets were less confident that negative interest rates would be implemented which supported Sterling sentiment to some extent.

There were also reports that the EU was prepared to make concessions on fishing within the UK/EU trade talks which underpinned sentiment. The UK currency gained support from the general improvement in risk appetite and a weaker US currency. There was a peak above 1.2350 against the dollar before a limited correction while the Euro dipped below 0.8900 before selling eased. The UK currency was little changed on Wednesday with a slight retreat to 1.2320 as the dollar regained some ground.


The Swiss franc edged lower on Tuesday as risk appetite improved and global equity markets made net gains. The Euro moved above the 1.0600 level, although it failed to hold its best levels. The US currency posted significant losses to the 0.9650 area. Markets will continue to monitor Euro-zone political developments closely in the short term with a dip in defensive franc demand if there is a breakthrough on proposals for the EU recovery fund.  The Swiss franc edged stronger on Wednesday amid fears over US-China tensions with the Euro back below the 1.0600 level while the dollar secured only a marginal recovery.



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

Daily market commentary on LME aluminium, copper, lead, nickel, tin and zinc.

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.

FX Monthly Report December 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we focus on China, highlighting the fundamentals for the macroeconomy, as well as any changes to the PBOC in the coming months. The recent cut in the risk reserve requirement suggests monetary loosening. We also outline the movement between the onshore and offshore currency for those looking to arbitrage or hedge their exposure. This analysis gives an indication of the average width of the spread what key levels to look out for.

Quarterly Metals Report – Q4 2021

The global macro picture is starting to present some downside risks in the near term as China's economy is set to slow further and supply-chain bottlenecks continue to cap growth. New orders and new export orders in China are contractionary, and we expect demand in Q4. Order backlogs and lead times for products will continue in Q4, limiting growth, and real consumption is weaker than it looks. Higher costs from shipping, raw materials and energy will take their toll on the consumer, and we expect end-user demand to suffer. The final piece of the jigsaw is the reduction in stimulus from central banks and how that will impact financial markets, bond yields, and the dollar has rallied while stocks corrected, but what will this trend continue?