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

Daily FX Report

Read disclaimer

EUR / USD

 

The Euro-zone PMI services index was revised higher to 58.3 for the final reading from the flash reading of 58.0 with the Spanish and Italian figures both above consensus forecasts which helped underpin confidence in the Euro-zone recovery.

The Euro-zone Sentix investor confidence index strengthened to 29.8 for July from 28.1 previously, although this was marginally below consensus forecasts. The German ZEW data will monitored on Tuesday, although a limited reaction is likely. Markets will monitor any comments from ECB officials in the short term.

The Euro posted limited gains ahead of Monday’s New York open with measured net support from the data as bond yields edged higher. Overall ranges were still narrow with the Euro peaking around 1.1880 before stalling.

The dollar was held in very tight ranges as New York markets were closed. Commodity currencies secured tentative gains and the US currency overall was little changed with the Euro near 1.1870 with low trading volumes the main element.

There will be a further element of caution ahead of Wednesday’s Federal Reserve minutes and comments from central bank officials will continue to be monitored closely in the short term, especially with on-going speculation that inflation rates will increase further in the short term.

Commodity currencies posted net gains on Tuesday amid increased speculation that interest rate increases would be brought forward. The expectations of firmer global monetary policies curbed potential US currency support and the US dollar was unable to make any headway with limited net losses. The Euro advanced to around 1.1890 even though the latest German industrial orders data was weaker than expected with a sharp 3.7% decline for May.

 

JPY

 

The dollar was held in narrow ranges ahead of Monday’s New York open with little change in US equity or bonds futures. In this environment, the dollar was held just below 111.00 against the yen. Narrow ranges continued with Wall Street closed while the yen resisted significant selling pressure and the dollar consolidated just below 111.00. Markets will be watching gauges of US and global liquidity to help assess the risk of a setback in global risk conditions.

US Treasuries edged lower during Tuesday’s Asian session while confidence in the global economy remained firm. Oil prices also posted further gains during the Asian session as OPEC failed to reach an agreement on raising output levels.

The dollar was unable to make headway and retreated to near 110.80 against the Japanese yen with the Euro around 131.65.

 

GBP

 

The final UK PMI services index was revised higher to 62.4 from the flash reading of 61.7 which maintained confidence in the services outlook while the composite index was slightly above consensus forecasts at 62.2. There was a further sharp increase in new orders on the month and there were important supply-side difficulties which resulted in a sharp increase in unfilled orders. There was strong upward pressure on costs with increased at the fastest pace on record and charges also increased at the fastest pace on in the survey’s history. The data provided an element of Sterling support and overall global risk appetite also held steady which helped underpin sentiment. Sterling held above 1.3800 against the dollar and the Euro was unable to make headway.

Prime Minister Johnson confirmed that the government is still aiming to relax all business restrictions in England on July 19th with removal of mandatory social distancing. The move had been flagged heavily ahead of the announcement, limiting the market impact. Sterling held a firm underlying tone, although there were reservations over high level of new infections in the country. Commodity currencies posted gains during the Asian session which helped underpin the UK currency and it advanced to near 1.3900 against the dollar while the Euro retreated slightly to near 0.8550 as demand for reflation trades remained high.

 

CHF

 

The Swiss sight deposits declined slightly to CHF712.1bn in the latest week from CHF712.5bn previously which indicated that the National Bank had not been intervening to weaken the Swiss currency during the week despite a firm currency tone.

The franc drifted lower on Monday, although overall moves were constrained. There were further gains for gold which provided an element of support for the Swiss currency. The Euro still secured a net advance to 1.0940 while the dollar found support close to 0.9200, but was unable to regain territory and retreated in early Europe.

 

 

Technical Levels 

Today's Events

Contents

Disclaimer

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 July 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. Cryptocurrencies are the focus of this month's FX Monthly report. The report includes a macroeconomic overview as well as desk comments and technical analysis on key currency pairs.

Quarterly Metals Report – Q3 2021

COVID cases are rising across the globe as the delta variant spreads, this is causing some nervousness in financial markets, especially with the higher inflation rhetoric. Commodity prices have fallen since the Fed changed their tune inflation, the dollar has stabilised which has also been a headwind to prices. The summer months are traditionally quieter for metals demand which could prompt metals to consolidate. If the delta variant continues to spread, we may see higher levels of stimulus for longer. As things stand stimulus levels are set to be tapered and this could be brought forward if inflation remains high. We expect markets to remain volatile but on lower volume through the summer months.