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

Daily FX Report

Read disclaimer


According to flash data, the September German PMI manufacturing index strengthened to 56.6 from 52.2 and above consensus forecasts of 52.5, but the services-sector index declined to 49.1 from 52.5 previously and below expectations. There was a similar pattern for the Euro-zone as a whole with the manufacturing index at 53.7 from 51.7 while the services-sector index retreated sharply to 47.6 from 50.5. The data reinforced market concerns that a renewed increase in coronavirus cases was undermining activity in the services sector. There was a wider dip in confidence over the outlook, especially with further restrictions coming into force. In this environment, overall Euro sentiment remained fragile with the currency drifting lower amid a further paring of long Euro positions. 

The US manufacturing PMI index increased slightly to 53.5 from 53.1 and slightly above consensus forecasts while the services-sector index edged lower to 54.6 from 55.0 previously and in line with expectations. Rhetoric from Federal Reserve Chair Powell was little changed from the previous day.

Fed vice-chair Clarida stated that the central bank is not even thinking of raising interest rates until actual inflation is at 2%. Any judgement on any inflation overshoot will be made closer to the time. He reiterated that inflation needed to spend some time with inflation above 2% to offset time spent below this level.

The comments from Chicago head Evans were more dovish than on Tuesday as commented that inflation should be at 2.5% for some time if the Fed is doing its job right. The US currency was resilient despite the relatively dovish Fed comments with the Euro continuing to move lower and dipping below 1.1650 against the dollar.

The dollar secured defensive support as risk appetite slipped again with commodity currencies coming under sustained pressure once again. The dollar maintained a firm tone on Thursday as global risk appetite remained fragile and continued to fuel US demand with the Euro around 1.1650.



US equities remained on the defensive on Wednesday, although the yen was unable to gain any significant support. The dollar strengthened to the 105.40 area and the Japanese currency also lost ground on the main crosses. There was some evidence that weakness in precious metals had some negative impact on the yen.

Boston Fed President Rosengren stated that the coronavirus pandemic was likely to get worse over the next few months with economic activity liable to increase. There would also be the risk of a credit crunch if there is an increase in bad loans within the commercial real estate sector.

There were fresh doubts whether there would be any fiscal stimulus ahead of the election with Congress potentially set to enter recess at the end of this week. There were also fresh concerns over the risk of a disputed Presidential election result which hampered risk appetite. US futures retreated on Thursday and Asian markets also posted net losses with no major Japanese developments. The dollar and yen both gained an element of support with the US currency around 105.35.



The September flash PMI data for the manufacturing sector retreated to 54.3 from 55.2 while there was a steeper decline in the services sector to 55.1 from 58.8 while overall business confidence declined to a 4-month low amid underlying reservations over the impact of coronavirus reservations. Employment also continued to decline on the month, although the rate of job losses did slow. There was some relief that an even steeper rate of the slowdown was avoided.

Chancellor Sunak will announce economic-support measures on Thursday and an extension of loan guarantees and it was also announced that there will be no budget statement this year. Sunak is expected to provide wage-support measures to cushion the impact of ending the furlough scheme and provide some wider support.

These expectations provided an element of Sterling support and there were also some tentative hopes surrounding the possibility of progress in Brexit talks.

Sterling recovered from 2-month lows below 1.2700 against the dollar while the Euro retreated to just below 0.9150 before stabilising. The vulnerable tone in risk appetite sapped UK currency support late in the session and Sterling was close to 1.2700 against the US currency on Thursday with the Euro around 0.9170.


The Swiss franc was unable to make headway on Wednesday despite fresh concerns surrounding the Euro-zone recovery. The Euro secured a limited net advance to near 1.0785 despite losses elsewhere while the dollar pushed to highs near 0.9240.

The National Bank will announce its latest policy decision on Thursday with expectations that rates will be maintained at -0.75%. Rhetoric on the currency will be monitored very closely in the statement. The franc edged higher in early Europe as risk appetite remained vulnerable with the dollar around 0.9235.



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.