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

Daily FX Report

Read disclaimer


German exports increased 2.3% in the year to September from 2.9% previously and slightly above consensus forecasts. The Euro-zone Sentix investor confidence index weakened slightly to -10.0 for November from -8.3 previously, although slightly better than consensus forecasts of -15.0.

Markets conditions were initially contained in Europe, but the mood changes dramatically ahead of the New York open. Pfizer announced that its vaccine candidate had achieved over 90% efficacy based on initial trial results and that it had found no safety concerns. It also stated that the trial could be completed this month and it will look for regulatory approval before the end of this year. Risk appetite surged on the announcement which initially undermined potential defensive dollar demand.

The Euro pushed higher and commodity currencies also posted strong gains. The Euro peaked around 1.1920, but was then subjected to a significant correction and the single currency then declined sharply as a wider correction unfolded and US yields moved higher. The Euro was also vulnerable to a correction after a sharp run-up from lows near 1.1600 posted on last week’s US election night. As the dollar regained traction, the Euro dipped to lows just below 1.1800 before stabilising.

Dallas Fed Kaplan reiterated that the Fed could need to keep rates at zero for another two years while Cleveland head Mester stated that there is more than that can be done to provide further monetary easing. The dollar edged lower on Tuesday with risk conditions remaining a key focus as the Euro traded around 1.1830.



Global equity markets moved sharply higher following the Pfizer vaccine announcement and there was also a notable increase in US bond yields. The 10-year yield advanced to a peak above 0.95%, the highest reading since the third week of March. Defensive demand for the Japanese currency declined sharply as risk appetite strengthened and the dollar secured strong gains as yields moved higher. In this environment, the dollar surged to highs above 105.50 after the Wall Street open.

In its latest financial stability report, the Federal Reserve warned that asset prices could decline sharply if the coronavirus outbreak is not contained. Business debt has increased sharply and the ability to service debt has weakened while loan defaults are liable to increase. Political developments will continue to be watched closely with President Trump attempting to prevent Pennsylvania from certifying their election result while the Biden camp increased pressure for the transition process to be started.

Japanese economy minister Nishimura stated that the government is drawing up a further economic package. There was a slightly more cautious tone in Asian trading on Tuesday with a limited correction in equities and the dollar edged back below the 105.00 level before gaining ground again as US equity futures pared losses.



Markets continued to monitor trade talks closely during the day with negotiators facing a critical week ahead. The main focus, however, was on global risk conditions and the positive vaccine news. Sterling moved sharply higher on the news with the UK currency strengthening to 2-month highs above 1.3200 against the US dollar. There was a sharp reversal in New York as the dollar rebounded, although the Euro still posted net losses against the UK currency.

Any move towards a vaccine should help underpin Sterling sentiment, especially given the extent of economic damage. There were still underlying concerns surrounding the UK economic outlook and medium-term financing pressures with coronavirus restrictions remaining in force in the short term.

The UK currency dipped to around 1.3120 against the dollar before regaining ground while the Euro retreated to below 0.9000 amid hopes for a trade deal.

As expected, the House of Lords defeated the Internal Markets Bill and it will return to the House of Commons. The government has insisted that the controversial clauses will be re-instated. BRC sales data recorded a 5.2% year-on-year increase for October with an element of stock building while Barclaycard recorded a 0.1% annual decline in consumer spending. UK unemployment jobless claims count declined 30,000 for October, but payrolls declined slightly for the month while unemployment increased to 4.8%. Sterling held a firm tone in early Europe just below 1.3200 against the dollar while the Euro retreated to near 0.8970.



The Swiss franc declined sharply on Monday as risk appetite surged. The franc was also undermined by sharp losses in the Japanese yen and precious metals as gold posted losses of near 5.0%. The Euro strengthened sharply to highs above 1.0800 before fading slightly while the dollar secured net gains to 0.9130 in volatile markets.

Swiss sight deposits were unchanged in the latest week which suggested the National Bank (SNB) had not been intervening. A global recovery would alleviate support for the Swiss currency and a new US Administration may also be less concerned over SNB intervention. The franc edged higher on Tuesday with the dollar near 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.