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

Daily FX Report

Read disclaimer



The Euro held a firm tone in early Europe on Wednesday but was unable to extend gains and the dollar was able to recover some territory ahead of the New York open. There were further expectations of recovery in the Euro-zone economy which provided underlying Euro support, especially with an easing of coronavirus restrictions.

Markets were monitoring ECB rhetoric closely for any evidence of whether opposition to Euro gains would increase.

There was some speculation that gains in the Chinese yuan would increase tolerance within the central bank for a stronger Euro, although markets were still wary over potential verbal intervention to cap gains and rhetoric will be monitored closely in the short term.

Overall risk conditions were slightly less confident which curbed the potential for further short-term dollar selling with the US currency recovering from 4-month lows and the Euro drifted lower after again failing to hold above the 1.2250 level.

The dollar gained fresh support into the London fix and maintained a firmer tone after the European close with the Euro dipping below the 1.2200 level. There is scope for further month-end position adjustment over the next two days, although overall volatility has remained subdued.

Fed Governor Quarles stated that it will be important to begin discussing plans to adjust asset purchases at upcoming meetings. Inflation is likely to meet the bar for tapering later this year, but labour market improvement will be slower. He added that the central bank may need more communication about what substantial progress means and does not expect will sustain a move above 2%. Markets will watch the PCE prices data more closely than usual on Friday for further evidence on inflation. The dollar was unable to extend gains on Thursday, but the Euro traded just below the 1.2200 level as German consumer confidence recovered less than expected.




US Treasuries held a firm tone into Wednesday’s New York open with the US 10-year yield below 1.60% while the 5-year yield was below 0.80% which continued to sap underlying dollar support. US equity futures also lost ground which provided an element of yen protection. Overall, the dollar initially failed to hold above the 109.00 level. As the US currency gained wider support after the European close, however, there was an advance to near 109.20 against the Japanese currency.

Japan announced that employment and wages support will be extended until the end of July and overall confidence in the Japanese outlook remained weak which limited yen support. US equity futures drifted lower on Thursday, but overall risk conditions held steady with some support from relatively constructive rhetoric surrounding US-China trade talks, although US Trade Representative Thai stated that the US still faces large challenges with China across the board.

Chinese industrial profits data was strong with the dollar trading just above 109.00 as US bond yields traded marginally higher.




There were no significant UK economic data releases on Wednesday with markets tending to focus on the political drama of testimony to the House of Commons. Prime Minister Johnson’s former adviser Cummings made a sustained attack over the government’s coronavirus performance.  At this stage, markets assumed there would be only a limited impact on the government outlook despite strong criticism of Prime Minister Johnson and Health Secretary Hancock.

Sterling edged higher into the New York open, but was hampered after the New York open by a slightly more fragile tone surrounding risk appetite. The UK currency was unable to make an attack on the 1.4200 level against the dollar and dipped back below the 1.4150 level. Sterling also dipped lower into the London fix with some evidence of month-end selling as the dollar regained territory while the Euro retreated from highs above 0.8650.

Overall volatility levels, however, remained subdued during the day, especially against the Euro with the Bank of England expected to remain neutral at this stage. Sterling dipped below 1.4100 against the dollar in Asia before trading just above this level in Europe with the Euro around 0.8640.





The ZEW economic expectations index strengthened to a fresh record high of 72.2 for May from 68.3 previously, maintaining expectations of a strong recovery in the Swiss economy. Markets continued to monitor global inflation developments closely with long-term concerns providing some franc support.

The Euro was unable to make any headway despite underlying Euro-zone recovery expectations and retreated to just below 1.0950 while the dollar posted net gains to near 0.8990. The franc held a solid tone on Thursday with the dollar around 0.8970 with central bank rhetoric in focus.



Technical Levels


Today's Events



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.