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

Daily FX Report

Read disclaimer


Relatively tight ranges prevailed ahead of Wednesday’s New York open with inevitable caution ahead of the US inflation data. The dollar edged higher with a covering of short positions and the Euro retreated towards the 1.2115 area. Recovery expectations provided some underlying Euro support.

The EU Commission increased the Euro-zone 2021 GDP growth forecasts to 4.3% from 3.8% previously and the 2022 outlook was also upgraded. The Commission expects a significant easing of coronavirus restrictions during the second half and the EU also announced that budget rules would be suspended until the end of 2022.

US consumer prices increased 0.8% for April which was substantially above consensus forecasts of 0.2% and the strongest monthly increase since August 2008. The year-on-year increase jumped to 4.2% from 2.6%, also well above market expectations of 3.6% and the highest reading since October 2008.

Underlying prices increased 0.9% on the month compared consensus forecasts of 0.3% with the year-on-year rate at 3.0% from 1.6%. This was the highest core reading since the beginning of 1996. There was a sharp increase in energy services prices on the month and there was a 10% surge in the price of second-hand vehicles to give a 21% annual increase. There were also strong price increases in commodities on the month.

The dollar jumped higher on the data with the Euro dipping to lows near 1.2075. The dollar quickly retraced gains, but regained traction later in the session, especially with sharp losses for commodity currencies and the Euro retreated to 1.2070. Markets attempted to stabilise on Thursday with the Euro around 1.2080. Inflation developments will remain a key element in the short term with the producer prices data due later in the day.


US Treasuries dipped sharply in an immediate reaction to the much higher than expected US inflation data. The 10-year bond yield strengthened to 1.65%, but there was a quick reversal and the dollar strengthened to highs around 109.20 before also fading as volatility increased sharply.

Fed Vice-Chair Clarida stated that inflation was likely to increase further in the short term before moderating later in the year. He reiterated that the inflation rise above 2.0% is due to transitory factors. There was, however, a slight shift with comments that he would take it very seriously if longer-term inflation expectations started to move higher. He also noted that the Fed does not have infinite tolerance for inflation. Markets indicated an 80% chance of a rate increase before the end of next year. Bond yields moved sharply higher again towards the European close and the dollar strengthened to around 109.40. The dollar maintained a stronger tone into the New York close as yields remained higher with a peak around 109.80. Bank of Japan Governor Kuroda stated that the bank is prepared to extend pandemic relief beyond September if needed. Risk conditions attempted to stabilise, curbing potential yen demand on safe-haven grounds, and the dollar was held around 109.75.


Overall confidence in the UK recovery outlook was sustained following the batch of data releases. The growth data did not dampen expectations of a strong recovery in the economy while the trade data and a net recovery in EU exports also lessened the immediate risk of selling on the grounds of Brexit concerns.

In this environment, Sterling was able to maintain a firm underlying tone. The UK FTSE index also out-performed in global terms which underpinned the UK currency.
Sterling did retreat against the dollar following the US inflation data, but the Euro retreated to 1-month lows. The UK currency was undermined by higher US yields and weaker equities. The UK currency dipped to near 1.4050 against the dollar while the Euro recovered to 0.8590.

Bank of England chief economist Haldane maintained a hawkish stance on the outlook for growth and inflation and continued to back a reduction in asset purchases, although he will leave the bank next month. The RICS house-price index strengthened to 75% from 59% previously and the highest reading for 40 years. Sterling sentiment held firm on recovery expectations and it traded around 1.4050 against the dollar with the Euro around 0.8600


The Swiss currency was unable to make headway during Wednesday despite the stronger than expected reading for US inflation. Markets continued to monitor global inflation trends closely, especially given the franc’s long-term credentials of holding value.

The Euro was unable to make an attack on the 1.1000 area and settled little changed around 1.0970 while the dollar posted net gains to 0.9080.
The franc did not secure notable support from weaker risk conditions with the Euro around 1.0975 and the US currency around 0.9085.



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...

Weekly Report FX Options

Our FX Options Report contains commentary and analysis covering OTC currency option pricing, volatility and positioning. 

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.

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.