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

Daily FX Report

Read disclaimer


There was a significant impact from October Euro-zone flash PMI business confidence data released on Friday. French data recorded a contraction in activity in both services and manufacturing. The German services-sector data also dipped into contraction at 48.9 from 50.6 previously, but the manufacturing index strengthened to 58.0 for October from 56.4 previously which was above expectations and the strongest reading for over two years. The Euro-zone manufacturing index edged higher to 54.4 from 53.7 while the services index retreated further into contraction at 46.2 from 48.0 previously.

Although there were further concerns over trends in the service sector, the data overall provided an element of relief and the Euro moved significantly higher on the data with a move above 1.1850 against the dollar. The US currency also lost ground amid a lack of confidence in longer-term fundamentals.

The US manufacturing PMI index increased marginally to 53.3 from 53.2 and close to consensus forecasts while there was strengthening in the services sector to a 20-month high of 56.0 from 54.6. New business growth slowed slightly, however, and there was a dip in export orders and there was a slowdown in employment growth.

The dollar regained ground after the data, although there was Euro support close to 1.1825 before a recovery to 1.1850.

CFTC data recorded only a slight decline in long Euro positions, maintaining the risk of position adjustment and Euro selling. S&P held the Italian credit rating at BBB, but raised the outlook to stable from negative which provided some relief. There were further concerns over Euro-zone coronavirus developments with a surge in cases in Italy and France while further restrictions came into force. The dollar gained some fresh demand despite US fears with the Euro retreating to the 1.1830 area. 


US equities posted further net gains on Friday despite a lack of positive signals on the outlook for near-term policy stimulus. Treasury Secretary Mnuchin stated that there were still significant differences with House Speaker Pelosi. Overall, the dollar settled around 104.70 after failing to make an attack on the 105.00 area.

There were no major developments surrounding a fiscal stimulus during the weekend with markets less confident of support measures ahead of the elections while Pelosi noted on Sunday that she expected a White House response to the latest proposals on Monday. Democrats will be less willing to compromise if they are confident in securing an election victory next week. Political rhetoric and opinion polls will be watched closely in the short term.

Markets were watching coronavirus cases closely as the number of US cases continued to increase and several aides of vice-president Pence also tested positive. Overall risk appetite was more cautious with a retreat in US equity futures. The yen secured slight net gains on the crosses while the dollar advanced to near 105.00.


According to flash data, the UK PMI manufacturing index declined to 53.3 for October from 54.1 while the services-sector index retreated sharply to 52.3 from 56.1 as confidence weakened further. Inevitably, there was particular weakness within the hospitality sector. There were further sharp declines in employment for the month, but manufacturing confidence strengthened. The data maintained concerns over the outlook with fears that the economy would stall for the fourth quarter which hurt Sterling.

The UK currency did spike higher following reports that France was preparing to make concessions on fishing in the Brexit trade talks. The UK currency failed to hold the gains above 1.3100 against the dollar and dipped to 1.3050 as the US currency recovered some ground. The Euro also made notable gains to the 0.9100 area.

CFTC data recorded a decline in short Sterling positions to a 4-week low of 2,000 contracts for the latest week from 10,000 previously, reinforcing evidence of a lack of confidence in direction. S&P held the UK credit rating at AA and also maintained a stable outlook. A UK government spokesman stated that the trade talks had been extended until Wednesday and there was an element of optimism. Sterling, however, was hampered by the more fragile risk tone and retreated to test 1.3000 against the dollar while the Euro strengthened to around 0.9095. Trade rhetoric and risk trends will continue to be watched very closely in the short term.


The Euro was able to make some headway on Friday with an advance to the 1.0730 area. The dollar was unable to sustain an advance to the 0.9100 area and dipped back to lows below 0.9050. Underlying loose global monetary policies and substantial liquidity continued to provide an element of underlying franc support.

There were expectations that release of the US Treasury report on currencies would be delayed until after the election. National Bank actions and rhetoric will continue to be monitored closely. The Swiss currency was protected by weaker risk conditions on Monday with the Euro retreating to near 1.0700.



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

Daily market commentary on LME aluminium, copper, lead, nickel, tin and zinc.

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.

FX Monthly Report December 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we focus on China, highlighting the fundamentals for the macroeconomy, as well as any changes to the PBOC in the coming months. The recent cut in the risk reserve requirement suggests monetary loosening. We also outline the movement between the onshore and offshore currency for those looking to arbitrage or hedge their exposure. This analysis gives an indication of the average width of the spread what key levels to look out for.

Quarterly Metals Report – Q4 2021

The global macro picture is starting to present some downside risks in the near term as China's economy is set to slow further and supply-chain bottlenecks continue to cap growth. New orders and new export orders in China are contractionary, and we expect demand in Q4. Order backlogs and lead times for products will continue in Q4, limiting growth, and real consumption is weaker than it looks. Higher costs from shipping, raw materials and energy will take their toll on the consumer, and we expect end-user demand to suffer. The final piece of the jigsaw is the reduction in stimulus from central banks and how that will impact financial markets, bond yields, and the dollar has rallied while stocks corrected, but what will this trend continue?