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

Daily FX Report

Read disclaimer


The Euro edged higher ahead of Monday’s New York open with the dollar drifting lower as the robust tone in risk appetite curbed potential US currency demand.

ECB President Lagarde reiterated that the central bank would carefully assess all incoming information, including developments in the exchange rate, with regards to its implications for the medium-term inflation outlook. There were additional comments that it was clear that the Euro’s external value had an impact on inflation. She also noted that the bank was ready to adjust all instruments as appropriate with markets still pricing in a small cut in interest rates over the next few months. There were, however, further reports of a rift within the ECB with the more hawkish members wanting to slow the pace of bond purchases and rhetoric will be watched closely.

The Dallas Fed manufacturing index strengthened to 13.6 for September from 8.0 previously and above expectations of 9.5.

There was still significant unease over the extent of short dollar positions in the market and the threat of a short squeeze which limited US selling. The Euro retreated in early US trading, but there was support towards the European close as gains in equities fuelled further US dollar weakness. The US currency edged lower on Tuesday with the Euro trading around 1.1665. The comments from Fed officials will be monitored during the day with month-end position adjustment also a significant element.



Risk appetite maintained a robust tone on Monday with sharp gains in US equities which limited potential defensive Japanese yen support. The dollar was unable to make headway amid wider losses, but settled around 105.50 with the yen edging lower on the major crosses.

Fiscal policy will remain a significant background focus with House Speaker Pelosi again meeting Treasury Secretary Mnuchin. Pelosi outlined a revised $2.2trn stimulus proposal, but there was no evidence of support from the Republican-controlled Senate which would be needed for support measures to be approved.

The Bank of Japan stated that the pace of recovery was only moderate and the bank must be vigilant. There was an element of caution ahead of the first Presidential TV debate between Trump and Biden with the analysis of the debate and market reaction providing potentially important markers for the November vote.

Risk appetite held firm on Tuesday with the US currency holding above the 105.50 level while the Euro traded just above the 123.0 level.



Bank of England Deputy Governor Ramsden stated that it was essential to look at implementation issues surrounding negative interest rates if they were part of the bank’s toolbox, but he reiterated that there would be no immediate move to implement negative rates. He also pointed to structural issues in the UK financial sector which would tend to make negative rates less attractive. The comments overall dampened expectations of a move to cut rates into negative territory.

Cabinet Minister Gove took an optimistic slant on the UK-EU joint Committee meeting, emphasising that the UK wanted to implement the Withdrawal Act in full and that controversial clauses in the Internal Market Bill were a safety net. Trade Minister Truss stated that US-UK trade talks were making significant progress.

Sterling pushed sharply higher after Ramsden’s comments with a peak above 1.2920 against the dollar while the Euro dipped to 3-week lows near 0.9030 as risk appetite also strengthened on the day with strong gains for equities. The EU was still critical of the UK stance, especially on the Internal Market Bill. Although equities made further headway, Sterling retreated in New York trading. Early in Asian trading, there were reports that the EU had agreed to start writing a joint legal text which would be an important step forward and the negotiations due to start today will be extended.

UK and US political developments, together with trends in risk appetite, will continue to be watched very closely in the short term. Month-end position adjustment is liable to increase volatility over the next 36 hours with Sterling just above 1.2850 against the dollar with the Euro around 0.9080.



Swiss sight deposits increased to CHF704.5bn in the latest week from CHF703.9bn the previous week which suggested only very limited National Bank intervention to curb franc gains during the week. The Euro pushed to highs around 1.0830 against the Swiss franc as equity markets made strong headway, but there were renewed losses to near 1.0780 late in Europe while the dollar retreated to below 0.9250 after failing to break the 0.9300 level.

European political developments will continue to be monitored closely in the short term with the franc liable to lose an element of support if there is evidence of progress being made in UK-EU trade talks. The Swiss currency was resilient on Tuesday with the dollar just below 0.9250.



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

Commentary and analysis covering OTC currency option pricing, volatility and positioning. This week we focus on USDSGD and whether the SDG recent strength is sustainable given the deteriorating global outlook. 

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.