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

Daily FX Report

Read disclaimer


Euro-zone retail sales increased 2.0% for December with a 0.6% annual decline from -2.2% previously, but with expectations of further setbacks in the first quarter of this year. The Euro overall was undermined by a lack of confidence in the vaccine programme and the single currency remained under pressure. The German IFO institute warned that it expects coronavirus restrictions to last until mid-September which also contributed to generally negative sentiment with expectations that the Euro-zone would under-perform relative to the US. The Euro also broke below the 1.2000 level which encouraged further selling and a paring of long positions.

US initial jobless claims declined to 779,000 in the latest week from a downwardly-revised 812,000 previously and below consensus forecasts of 830,000. Continuing claims also declined to 4.59mn from 4.79mn previously. There was also a decline in the numbers claiming pandemic assistance which provided some relief and maintained a more optimistic stance towards the monthly jobs data on Friday. Consensus forecasts are for an increase in non-farm payrolls of around 85,000 for the month with the unemployment rate unchanged at 6.7%. Strong data would increase confidence in US out-performance.

Kansas City Fed President George stated that financial stability is an essential condition for Fed goals which suggested reservations over a prolonged period of very low interest rates, although St Louis head Bullard considered that there were no financial stability risks at present.

The dollar overall strengthened to fresh 2-month highs as underlying short covering continued and the Euro retreated to 2-month lows below 1.1960. Narrow ranges prevailed on Friday with the Euro hampered by a decline in German industrial orders and trading around 1.1965 as the dollar maintained a robust tone.


US dollar strength continued to dominate during Thursday with the US currency continuing to make gradual headway against the Japanese currency.

Wall Street equities moved higher and there was a slight net increase in bond yields which also helped underpin the US currency. The dollar posted a 7th successive daily advance with 11-week highs just above 105.50 against the yen with a further net covering of dollar shorts.

US Treasury Secretary Yellen reiterated that there were still tough months ahead until the pandemic was under control and that it was really urgent to act big on economic relief. President Biden withdrew the previous Administration’s nomination of Shelton as a Federal Reserve Governor.

Risk appetite was stable on Friday while the Chinese yuan traded in narrow ranges and the dollar settled just above 105.50 against the Japanese currency.




The UK PMI construction index declined to 49.2 for January from 54.6 previously which was the weakest reading for 8 months and below consensus forecasts of 53.0. Residential activity remained strong, but civil and commercial activity contracted. Sterling continued to retreat to 1.3565 against the dollar after the data.

The Bank of England made no policy changes with interest rates held at 0.1% and total asset purchases at £895bn with both decisions unanimous.

The bank now expects a GDP contraction of 4.2% for the first quarter compared with slight growth expected in the November report. There was a downward revision to the 2021 forecast, but the bank still expects a powerful recovery later in the year.

There will be preparations to allow negative interest rates as part of the toolkit, but there will be no move to introduce them for at least six months and there appeared little enthusiasm for their introduction with no intention of any short-term move and Governor Bailey played down the potential for any introduction.

Strong recovery expectations and reduced expectations of negative rates triggered a sharp Sterling rally following the decision with markets moving to price out the potential for any move this year. The Euro dipped sharply to lows near 0.8750 while the UK currency recovered to above 1.3650 against the dollar. Sterling was able to maintain the advance and strengthened to near 1.3680 on Friday with the Euro at fresh 8-month lows around 0.8745.


The Euro was held in tight ranges against the Swiss franc on Thursday with both currencies generally out of favour amid a reduction in long positions in both currencies.

The Swiss currency was hampered by global reflation expectations while hopes for a resolution to the Italian political crisis also curbed immediate demand for the Swiss currency. The Euro settled around 1.0810 while the dollar advanced to 2-month highs around 0.9040.

The Swiss currency was little changed on Friday as volatility eased with the US dollar holding firm around 0.9035.



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.