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

Daily FX Report

Read disclaimer


The Euro was unable to gain traction ahead of Wednesday’s New York open with further reservations over the potential for ECB protests against Euro strength. There were further reports that the ECB was concerned over currency strength and there will be speculation over rhetoric to curb the advance at next week’s press conference.

The US ADP data recorded an increase in private-sector payrolls of 428,000 for August and well below consensus forecasts of a 950,000 increase for the month. There was only a small upward revision to July’s data to 212,000 from the 167,000 reported originally, although confidence in the data was limited.
The New York ISM business conditions index declined to 42.9 from 53.5 previously, increasing concerns that the economy could be losing momentum.

In comments on Wednesday, New York Fed President Williams stated that the new policy framework makes it clear that the Fed seeks maximum employment and to eliminate shortfalls. The central bank has reached the 2% inflation target briefly, but the challenge is to sustain it and an overshoot of the 2% target is desirable at present. According to Williams, the Fed has learned that there is no need to be pre-emptive on inflation, although he also warned that there is a risk that people think the Fed can do more than it can. He added that even the topic of raising interest rates is not one to focus on now and underlying rhetoric was very dovish rhetoric.

Cleveland Fed Mester stated that the US economic recovery appears fragile while a sustainable recovery requires further fiscal support. San Francisco head Daly reiterated that the role of fiscal support had never been stronger. Although the Fed rhetoric was again dovish, the dollar was able to make corrective net gains with the Euro retreating to lows near 1.1825 before a limited recovery. The dollar maintained a firmer tone on Thursday with the Euro testing the 1.1800 area.


The dollar edged higher into Wednesday’s US open amid a firm underlying tone while the yen was hampered by expectations that current Cabinet Secretary Suga would secure the LDP leadership in this month’s election and look to maintain the current economic policy framework.

The Federal Reserve Beige Book stated that economic gains were generally modest and activity remains well below pre-covid levels. Commercial construction and real estate remained in contraction, but residential construction was robust. Employment gained, but there was evidence of a slowdown while companies reported labour shortages due to childcare issues. Despite calls from Fed officials over the importance of fiscal support, there was no progress surrounding stimulus talks.

US equities gained further traction during the session which limited potential defensive yen demand and the dollar made net gains to the 106.25 area.

Markets continued to expect Suga would win the LDP leadership election which would imply policy continuity and lessen any potential upward pressure on the yen. Asian equity markets were mixed and there was no further improvement in the Chinese Caixin services PMI index with the dollar around 106.30.


EU Chief Brexit negotiator Barnier reiterated his concerns over a lack of progress in trade talks with particular concerns over the recent round in London. He called for the UK to make a move to break the deadlock now in order to meet the firm end-October deadline. He stated that the EU was prepared to make concessions on fisheries if the UK was also prepared to move. Markets continued to expect that political dynamics would lead to last-minute concessions.

Bank of England officials remained cautious over the outlook with warnings over the threat of permanent scarring. Governor Bailey stated that inflation was likely to be slightly higher than expected as VAT rate cuts had not be passed on as much as expected, but officials also stated that there was room to increase quantitative easing further if necessary. There was further speculation that the bank would increase the amount of bond purchases in the autumn.

Despite the cautious comments, Sterling was again resilient with expectations of very dovish policies by other central banks continuing to offer protection. The Euro was held below 0.8900 while Sterling found support below 1.3300 against the dollar. The Euro edged lower on Thursday amid a wider retreat with Sterling close to 1.3300.


Swiss National Bank member Zurbruegg stated that currency interventions are not intended to weaken the franc for the advantage of exporters with the currency sales aimed at maintaining price stability. The Swiss currency was resilient despite gains in US equity markets and losses for gold with capital outflows still subdued.

The Euro lost significant ground during the day with wider losses having a negative impact. The single currency dipped to the 1.0790 area while the dollar settled close to 0.9110 as gains faded. The Euro was held below 1.0800 on Thursday with the dollar around 0.9130.



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.