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

Daily FX Report

Read disclaimer


The Euro held a firm tone into Thursday’s New York open with the Euro moving above 1.1950 as the dollar remained generally on the defensive.
The ECB made no changes to interest rates. Bank President Lagarde stated that the overall economic situation is to improve in 2021, but uncertainty remains. She also noted that the inflation pick-up is mostly due to transitory factors, although projections also see a gradual increase in underlying inflation pressure. The 2021 inflation forecast has been revised up to 1.5% from 1.0% previously, but with only a marginal increase in the 2022 forecast to 1.2% from 1.1%.
As far as yields are concerned, he added that market rates do pose a risk to wider financing conditions and could lead to premature tightening. Although the total envelope for bond purchases was unchanged, Lagarde also stated that the pace of bond buying would be significantly faster in the next quarter with the rate of increases increasing immediately, although she denied that there was any intention to engage in a more formal yield curve control.
US initial jobless claims declined to 712,000 in the latest week from a revised 754,000 the previous week and below consensus forecasts of 725,000. Continuing claims also declined to 4.14mn from 4.34mn. There was, however, a sharp increase in pandemic assistance claims of over 2.0mn on the week with total claims over 20.0mn.
There were expectations of strong US growth, especially with a very strong fiscal stimulus with mixed implication for the dollar.
The Euro was hampered by further difficulties over the Euro-zone vaccination programme amid persistent supply difficulties. The single currency retreated to 1.1930 after the ECB PEPP move, but the dollar was unable to gain sustained support and the single currency strengthened to daily highs near 1.1980 at the European close. The Euro was unable to challenge the 1.2000 area and retreated towards 1.1950 on Friday as growth hopes underpinned the US currency.


Chinese US bond yields edged higher after the New York open as the jobless claims data maintained expectations of a strong economic rebound.
The dollar was able to gain only limited support and dipped back to just below 108.50 at the European close.
The $1.9trn economic support package was formally signed into law with individual cheques expected to be sent out shortly. Equity markets maintained a robust tone with the S&P 500 index posting a fresh record high after a 1.0% daily advance.
There were rumours that the Bank of Japan would drop the formal target for Exchange Traded Funds (ETF) funds, although the upper limited might be maintained.
US equity futures edged higher in Asia and Japan’s Nikkei index posted strong gains, although Asian markets overall were mixed. Firm risk appetite curbed demand for defensive assets which also sapped potential yen support. The dollar strengthened to the 108.85 area while the Euro edged above the 130.0 level. .


Overall confidence in UK economy remained robust during Thursday with expectations that there would be a strong recovery as lockdown measures are eased.
There was no significant market impact from the news that the Astra Zeneca coronavirus vaccine had been halted in several countries, including Norway and Denmark due to concerns over potential blood clots. There were no indications of any concerns over the UK programme.
The UK currency gradually gained ground against the US dollar with highs around 1.3980 towards the European close. Sterling was, however, unable to make further headway on the crosses despite further gains on Wall Street with a decline in the FTSE 100 index having some negative impact.
The Euro settled around 0.8565 after again finding support close to 0.8550 with Sterling also failing to advance further against the Japanese yen.
UK GDP declined 2.9% for January compared with expectations of a 4.9% decline, although there was a sharper than expected decline for industrial production. The Sterling gained marginally after the data with the Euro around 0.8560, although it was held below 1.4000 against the firmer US dollar.


The Swiss franc lost ground in early Europe on Thursday but did demonstrate some resilience later in the day despite a further advance in Wall Street indices. The Euro settled around 1.1075 while the dollar continued to decline with lows below 0.9250.
Demand for defensive currencies weakened on Friday following record highs for US indices and expectations of strong growth. The Euro edged higher to the 1.1090 area with the dollar paring losses to trade around 0.9275.



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.