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

Daily FX Report

Read disclaimer


The Euro maintained a steady tone into Thursday’s New York open, although the main feature was narrow ranges as the single currency failed to break higher while the dollar also failed to secure a significant recovery amid reservations over the short-term outlook.
The EU Commission lowered its 2021 GDP growth forecast to 3.8% from 4.2% previously but was optimistic over a strong recovery later in 2021.
US initial jobless claims declined to 793,000 in the latest week but was above consensus forecasts of 760,000 and the previous week’s data was revised sharply higher to 812,000 from the original figure of 779,000. Continuing claims declined to 4.55mn from 4.69mn while the number of pandemic assistance claims registered a very sharp increase of over 2.5 million for the latest week.
The dollar edged weaker following the data with fresh reservations over the near-term jobs outlook despite optimism that there would be a strong recovery later in the year. The US currency was also hampered by dovish comments from Fed Chair Powell on Wednesday as well as the subdued reading for underlying inflation which dampened expectations that the central bank would come under pressure to tighten policy.
The Euro edged to 2-week highs just below 1.2150 as US 2-year yields declined to fresh record lows.
There was some Euro support from reports that the Italian 5-Star Party would support a coalition government led by former ECB President Draghi. The Euro traded around 1.2125 in early Europe on Friday with the dollar was able to demonstrate some resilience against other major currencies as commodity currencies faded.


The dollar was held in tight ranges on Thursday with a lack of fresh incentives. The Japanese currency overall tended to drift lower during the day with some expectations of increased capital flows out of Japan. US yields edged higher during the day despite the subdued US jobless claims data.
Overall, the dollar edged higher to the 104.75 area, although overall market activity remained limited.
The US Congressional Budget Office projected a budget deficit of $2.26trn for the current fiscal year, but there would be further widening on another fiscal support package and there will be a high degree of uncertainty over the outcome with the dollar vulnerable to selling pressure on twin deficit fears.
Tight ranges prevailed on Friday with Chinese markets remaining on holiday which dampened activity. Equity markets edged lower, although the yen edged weaker on the crosses with the dollar posting slight net gains to just above 104.80 with the Euro just above the 127.0 level.


Sterling maintained a firm tone in early Europe on Thursday but faded later in the session despite further optimism over the UK vaccination programme. There was pressure for a correction against the dollar after a string of daily gains and the UK currency was also hampered by unease over UK fundamentals. The latest ONS estimate suggested that 18% of the workforce was on furlough in the latest week. The data illustrated underlying pressure on public finances if there is a rapid easing of coronavirus restrictions with some concerns that overall Sterling buying would fade.
There were also reservations over the risk of a prolonged battle between the EU and UK over access for financial services companies into the EU market.
The UK currency briefly pushed above 1.3850 against the dollar before fading in New York trading while the Euro strengthened to the 0.8780 area.
Bank of England chief economist Haldane maintained a bullish outlook on the UK recovery once restrictions are lifted with unintended savings liable to be £250bn by June which would release pent-up demand. UK GDP increased 1.0% for the fourth quarter of 2020, above expectations of 0.5% with a 9.9% contraction for 2020 while exports were weak. Investment data was also slightly stronger than expected and Sterling pared losses to trade at 1.3800 against the dollar with the Euro at 0.8790.


The Swiss franc was held in tight ranges on Thursday, although there were slight losses during the day. The Euro edged just above the 1.0800 level amid speculation that the National Bank would look to nudge the currency weaker. The US dollar was trapped around the 0.8900 level after sharp losses the previous day.
Relief over the Italian political situation had little impact on the Swiss currency while the decline in US yields limited potential selling pressure on the franc and the dollar traded marginally above the 0.8900 level as tight ranges prevailed.



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.