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

Daily FX Report

Read disclaimer


German consumer confidence recovered to -12.9 for February from -15.5 the previous month and stronger than consensus forecasts. Euro-zone industrial confidence recovered to -3.3 for February from -6.1 previously while the services-sector sentiment improved slightly to -17.1 from -17.7 as coronavirus restrictions continued to have an adverse impact. Euro-zone money supply growth strengthened to 12.5% in the year to January from 12.3% previously.
The German 10-year bond yield increased to -0.25%, the highest level for 11 months, which unsettled equity markets, but provided near-term Euro support.
The dollar came under renewed pressure ahead of the New York open with the Euro pushing higher and gaining fresh traction after a break above the 1.2200 level.
US initial jobless claims declined sharply to 730,000 in the latest week from a revised 841,000 the previous week and well below consensus forecasts of 835,000. Continuing claims also declined to 4.42mn from 4.53mn previously, although there was a renewed increase in pandemic emergency benefits for the latest week.
Durable goods orders increased 3.4% for January from 1.2% previously and above market expectations of a 1.1% gain with underlying orders increasing 1.4%.
Despite lower claims, the dollar secured only a limited reprieve and the Euro held comfortably above the 1.2200 level with 7-week highs near 1.2250.
Commodity currencies retreat sharply later in the session as US equity markets posted substantial losses. In this environment, the Euro also lost ground to break back below the 1.2200 level. Italy also recorded the highest number of coronavirus cases since early January which caused some unease. Risk appetite remained notably more vulnerable on Friday which supported the dollar and the Euro was below 1.2150 with month-end positioning likely to be a significant factor later in the day.


US bond yields moved steadily higher during Thursday with the 10-year yield moving to fresh 12-month highs above 1.45%. Higher US and German bond yields had a significant impact on undermining yen demand. The dollar moved above the 106.00 level and held a firm tone despite losses elsewhere with highs just above 106.40.
Kansas City Fed President George stated that Fed policy is set to remain highly accommodative for some time and the Fed is positioned to be patient. She reiterated that the real level of unemployment was much higher than the official data.
Wall Street equities moved sharply lower after the European close which eased selling pressure on the Japanese yen and the dollar was held just above 106.00.
Japanese industrial production increased by 4.2% for January, although there was still a 5.3% annual decline. The Bank of Japan still considered that risks to the economy and inflation are skewed to the downside. Governor Kuroda reiterated that there was no intention of shifting the 10-year yield target from around 0%.
President Biden’s $15 minimum wage measure was ruled out in the Senate which also dampened confidence in equity markets. The yen still gained only limited defensive support with the dollar around 106.20 in early Europe with the Euro just above 129.0 as risk conditions and yields dominated.


Sterling held firm in early Europe on Thursday, but underlying pressure for a correction gradually increased during the day and losses accelerated after the US open.
There were market concerns over underlying UK fundamentals which curbed the potential for further buying even though underlying vaccine optimism continued.
Global risk conditions dominated later in the day with Wall Street equities moving sharply lower. Overall risk appetite also deteriorated which triggered a sharp Sterling correction as the UK currency remained sensitive to underlying global risk conditions. There were also some concerns over underlying UK fundamentals.
The UK currency slid to test the 1.4000 level against the dollar from 1.4180 highs as the Euro continued the corrective recovery to near 0.8700. Overall risk conditions remained more fragile on Friday which further limited Sterling support. The UK currency dipped to below 1.3950 against the dollar with the Euro just above 0.8700. Markets remained wary over month-end position adjustment which could trigger Sterling volatility later in the day and the pound lost further support in early Europe.


The Swiss franc remained under pressure ahead of Thursday’s New York open with the Euro strengthening sharply to highs near 1.1100. The Swiss currency was again undermined by higher bond yields and a lack of demand for defensive assets as gold continued to lose ground in global markets.
The franc gained some respite as equity markets weakened and then strengthened further as Wall Street losses intensified. Risk appetite remained vulnerable on Friday with the Euro retreating to near 1.1000 while the dollar was held close to 0.9050.



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?