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

Daily FX Report

Read disclaimer


The German ZEW economic confidence index retreated to 70.0 for April from 76.6 the previous month and below consensus forecasts of 79.0. There was, however, a stronger than expected net improvement in the current conditions index to -48.8 from -61.0 previously. The Euro-zone expectations index improved slightly to 66.3 from 74.0 the previous month. The Euro drifted lower after the data, although overall moves were limited amid caution ahead of the US CPI data.

ECB council member Villeroy stated that the cause of higher inflation is only temporary and that it was too early to remove policy stimulus.

Delays to the Johnson & Johnson vaccine could be a significant setback given that the EU has placed huge orders for the vaccine, but the Euro was resilient.

The US NFIB small-business confidence index strengthened to 98.2 for March from 95.8 the previous month, maintaining confidence in the outlook.

US consumer prices increased 0.6% for March, above consensus forecasts of 0.5% with the year-on-year inflation rate increasing to 2.6% from 1.7% previously and the strongest reading since September 2018 as gasoline prices increased sharply. Core prices increased 0.3% on the month, above consensus forecasts of 0.2% with the annual rate increasing to 1.6% from 1.3% and above market expectations of 1.5%.

Although markets have been fretting over inflation risks and the consumer prices data was stronger than expected, US yields moved lower following the data. The 5-year yield dipped to below 0.85% from 13-month highs around 0.95% early last week. Markets also appear to have been positioned for a strong figure and dollar gains. In this environment, the dollar failed to gain support from the data and quickly lost ground with the Euro strengthening to highs near 1.1950. Commodity currencies rallied and the dollar remained on the defensive later in the session. The US currency retreated further to 3-week lows on Wednesday with the Euro trading around 1.1965.



 Risk appetite was slightly more fragile after news that the Johnson &Johnson vaccine rollout had been delayed in Europe due to blood-clotting concerns while US regulators also called for the domestic use to be suspended. This is a similar issue that has been seen in the AstraZeneca vaccine, increasing uncertainty.

Lower yields had a significant impact in undermining dollar support following the data with the US currency retreating to lows near 109.20. The dollar remained vulnerable later in the session and US yields moved lower following a strong US bond auction which also curbed US currency support.

Philadelphia Fed President Harker expressed confidence that inflation would not run out of control this year.

Japanese machinery orders declined sharply for February with an 8.5% slide after 4.5% drop the previous month which triggered wider concerns over the Japanese recovery outlook. The dollar overall remained on the defensive during the Asian session and retreated to 3-week lows below 109.00 with the Euro above 130.00.



 There was some disappointment that the UK GDP data failed to beat expectations and the trade data maintained underlying unease over underlying developments with volumes still below 2020 levels which will maintain reservations over the longer-term recovery outlook.

The Bank of England announced that chief economist Haldane would leave the bank in June. Haldane has talked up the recovery outlook this year and adopted a generally more hawkish stance. His departure could tilt the balance on the committee significantly and lead to a more dovish policy stance over the medium term with increased resistance to higher interest rates. In this context, Sterling dipped lower following the news.

The UK currency was also hampered to some extent by unease over the Johnson &Johnson vaccine and a fresh outbreak of cases for the South African variant.

Risk appetite was slightly firmer later in the session which curbed potential selling pressure. The UK currency settled near 1.3750 against the dollar with the Euro moving above 0.8700 before a retreat. Risk appetite held steady on Wednesday with Sterling trading around 1.3780 against the weak dollar with the Euro around 0.8685.




The franc maintained a solid tone on Tuesday with net support from a decline in US and global bond yields. Gains in precious metals were also significant in curbing immediate selling pressure on the Swiss currency with the Euro trapped close to the 1.1000 level.  

Lower bond yields continued to curb potential selling on the Swiss currency and the franc was resilient despite gains in global equity markets. The dollar remained on the defensive on Wednesday and traded at 6-week lows around 0.9200. Long-term US inflation concerns could potentially underpin core Swiss franc demand.



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?