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

Daily FX Report

Read disclaimer


In its latest monthly report, the German Bundesbank stated that the German economic recovery may lose some more momentum heading into the year-end. Industrial orders were likely to slow with caution over exports evident while the services sector remained constrained by coronavirus containment measures.
ECB President Lagarde stated that the recovery remains very uncertain, uneven and incomplete. In this context, the uncertain environment required very careful assessment, including developments in the exchange rate. The bank will certainly be relieved if the Euro strength fades, although losses in the face of a slide in risk appetite will do little for economic confidence. She also stated that the central bank has room to add to stimulus and can adapt its toolkit if the economy need more help.
The Chicago Federal Reserve national activity index declined to 0.79 for August from 2.54 for July. There were significant positive contributions from industrial production and employment, although there was a small negative contribution from the consumption and housing indicators.
Risk conditions dominated during the day with the dollar gaining strong support and as equity markets declined sharply. Commodity currencies were an important casualty and the Euro retreated to lows below 1.1750. The dollar overall strengthened to six-week highs before correcting late in the US session.
In comments released before a Congressional appearance on Tuesday, Fed Chair Powell reiterated that the central bank will do what it can for as long as it takes. The path ahead for the economy remained highly uncertain even though many indicators show marked improvement. The US currency faded slightly from its stronger levels as equity markets attempted to stabilise, although the bounce in commodity currencies was weak with the Euro trading near 1.1750 on Tuesday.


The dollar continued remained under pressure ahead of the New York open on Monday and retreated further to 6-month lows at 104.00 as risk aversion continued to underpin the Japanese currency. Risk appetite deteriorated sharply as Wall Street equities registered sharp losses and the Japanese currency secured strong support.
There were further concerns over US-China relations with reports that China was debating whether to release a blacklist of US companies. There were also reports that the TikTok Oracle deal would not be approved in China and underlying political uncertainty remained a key element.
Budget developments will also be monitored closely, although there were no major developments. New York Fed President Williams and Atlanta head Bostic both called for further fiscal support from Congress. In contrast, St Louis Fed President Bullard commented that the Fed had already delivered enough fiscal support to sustain economic momentum. The dollar secured support at 104.00 and recovered to 104.80 amid wider gains, although the yen still secured net gains on the main crosses.
The dollar was unable to sustain the advance and retreated to the 104.50 area as the yen held a firm tone on the crosses amid weak underlying capital outflows. Japanese markets remained closed for a holiday, although markets remained wary over the risk of verbal intervention from the Japanese Finance Ministry.


Sterling was undermined by the sharp slide in risk appetite during Monday as global equity markets declined and confidence in both the domestic and global economic recovery slipped. Warnings from key UK health officials over the near-term threat posed by coronavirus was also a negative element for the UK currency, especially with expectations that there would be further restrictions on national activity within the next few days.
Sterling declined to lows below 1.2800 against the dollar while the Euro secured net gains to highs near 0.9200 despite losses on the main crosses. There was a further tightening of local coronavirus restrictions and the UK government will also announce further measures this week including curfews for pubs.
There were further concerns that the underlying recovery will stall which undermined sentiment. Markets will also continue to monitor political developments with a further debate over the Internal Market Bill. Sentiment remained fragile with the UK currency just below1.2800 against the dollar as risk conditions remained fragile.


Swiss sight deposits edged lower to CHF703.9bn in the latest week from CHF704.1bn the previous week which suggests that the National Bank may have halted currency-market intervention. Estimates, however, suggest the bank has bought over CHF90bn in foreign currencies since the start of 2020 and concerns will persist.
The Swiss franc drew significant support from risk appetite during the day, especially with a slide in equities. There were also underlying concerns over Brexit developments. The Euro retreated to the 1.0760 area while the dollar secured net gains to just above 0.9150 with little net change on Tuesday.



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.