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

Daily FX Report

Read disclaimer


The German ZEW economic sentiment index strengthened to a 71.5 for July from 59.3 previously which was well above consensus forecasts of 58.0 and the strongest reading since early 2004. The current conditions component, however, actually declined marginally on the month and remained in heavy negative territory which indicates that there are still important concerns over the situation. The Euro-zone ZEW index strengthened to 64.0 from 59.6 previously.
The July US NFIB small-business confidence index declined to 98.8 from 100.6, maintaining speculation that the economic recovery overall was slowing.
The dollar was unable to make any headway in European trading and gradually lost ground amid an absence of defensive support. The Euro pushed to highs just above the 1.1800 level before hitting resistance. The single currency was hampered by a sharp decline in precious metals after the Wall Street open.
Producer prices increased 0.6% for July after a 0.2% decline the previous month while the core rate increased 0.5% on the month with an annual increase of 0.3%.
The dollar was able to find an element of support during New York trading with the Euro retreating slightly as commodity currencies also faded.
The US currency secured fresh support later in the session with the Euro dipping to daily lows. Higher US yields underpinned the dollar on Wednesday while commodity currencies and gold retreated further with the Euro retreating to near 1.1700 before a recovery to 1.1730 with further choppy trading in prospect.


Chinese new loans growth slowed to CNY993bn from CNY1810bn the previous month and notably below consensus forecasts while money supply growth slowed to 10.7% from 11.1%. The data triggered some reservations over Chinese growth prospects, although the impact was limited.
Risk appetite strengthened ahead of Tuesday’s New York with sentiment boosted by the Russian claim that it had already produced a coronavirus vaccine and would start mass production in September. Despite major reservations over the rapid decision to grant approval, there was wider optimism over the vaccine outlook.
The yen lost ground amid vaccine optimism which helped trigger dollar gains to highs just above 106.50 at the European close.
US equities dipped lower after comments from Senate majority leader McConnell that fiscal stimulus talks are at a stalemate. California also recorded a sharp increase in new daily coronavirus cases which also sparked an element of caution, but the dollar was broadly resilient amid wider gains. US yields were an important influence as the 10-year yield increased to 4-week highs just above 0.65% ahead of huge bond issuance.
The dollar maintained a stronger tone on Wednesday with a covering of short positions and the US currency advanced to 2-week highs near 106.80.


Following the latest UK labour-market data, there were further concerns over underlying employment weakness and fears that the headline unemployment rate would increase sharply in the autumn once the furlough scheme ended. Sterling did edge lower briefly, but continued to find support on dips and was notably resilient despite underlying concerns over the domestic economic outlook.
Yields at the latest Treasury 5-year gilt auction declined to -0.05% from -0.03% previously, reinforcing a lack of underlying Sterling support. There was a renewed increase in new coronavirus cases which provided an element of caution over buying the UK currency given the threat of further lockdown measures.
Sterling was again resilient during the day with some support from the solid global risk tone. The currency pushed to higher near 1.3130 against the dollar before fading while the Euro traded below 0.9000. As the US currency gained ground, Sterling retreated to near 1.3000 as dollar gains were a key influence. Second-quarter UK GDP was reported at -20.4% for the second quarter with a year-on-year declined of 21.7% and both estimates marginally above consensus forecasts following a stronger than expected 8.7% recovery for June. Manufacturing data also beat expectations, but investment slumped with slight Sterling gains as the Euro traded just below 0.9000.


The Swiss franc was undermined by firm risk conditions during Tuesday as global equity markets made significant headway. A sharp decline in precious metals also eroded franc support to some extent while the Japanese yen was out of favour.
The Euro settled around 1.0770 with the dollar edging just above 0.9150. The franc edged lower on Wednesday as precious metals remained under pressure while the dollar was able to secure a further limited advance. The dollar tested weekly highs at the 0.9200 level before consolidating just below this 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

Our FX Options Report contains commentary and analysis covering OTC currency option pricing, volatility and positioning. 

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.