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

Daily FX Report

Read disclaimer




Overall risk conditions continued to dominate ahead of Monday’s New York open with equity markets coming under renewed pressure. The dollar gained a further element of defensive support amid deteriorating sentiment and commodity currencies weakened further. The Euro did, however, find support close to the 1.1700 level and gained an element of protection from the closing of carry trades funded through the single currency.

ECB council member Schnabel stated that premature policy tightening would be a bigger mistake than waiting, maintaining expectations that the central bank would maintain a very accommodative stance in the short term despite higher inflation.

The US NAHB housing index edged higher to 76 for September from 75 the previous month and slightly above consensus forecasts of 74 which helped maintain near-term confidence in the housing sector. There was, however a warning from a major housebuilder that supply shortages would lead to lower than expected sales.

There was some speculation that the Federal Reserve would draw back from more hawkish policy language, especially given reservations over developments in China and this curbed dollar demand to some extent. In this environment, the Euro edged higher to 1.1730 at the European close but failed to make further headway. Tight ranges prevailed on Tuesday with the Euro around 1.1735 as the dollar retreated slightly and commodity currencies attempted to recover ground.




US Treasuries gained fresh support from risk aversion ahead of the New York open with further demand for liquid assets. The decline in US yields curbed potential dollar support and there was also renewed defensive demand for the yen. Given that the latest CFTC data recorded only a slight decline in short yen positions and there is still the potential for substantial position adjustment if fear dominates for an extended period.

The dollar faded from its best levels and weakened to near 109.50 against the Japanese currency as yen demand remained firm.

There were no expectations of significant policy changes by the Bank of Japan and the dollar remained under pressure around the Wall Street close.

There was further uncertainty over the US fiscal support package with further difficulties in getting legislation through congress.

Chinese markets remained closed on Tuesday, maintaining a high degree of uncertainty ahead of the re-opening on Wednesday. Expectations of further central bank liquidity injections helped soothe markets to some extent and US futures recovered ground, although Hong Kong stocks edged lower.

The dollar edged higher to just above 109.50 with the Euro around 128.50 as Evergrande attempted to offer reassurance, but sentiment remained notably fragile with the potential for sharp moves across asset classes when Chinese markets re-open. Markets will be braced for choppy conditions in Asia on Wednesday.




Sterling remained on the defensive during Monday with the slide in global risk appetite having an important in curbing demand for the UK currency. There was an early dip below 1.3700 against the dollar and it was unable to recover this level into the European close with losses to a 4-week trough below 1.3650.

There was an element of speculation that higher gas prices would undermine UK output and trigger a less hawkish Bank of England policy stance despite the fact that there will also be notable upward pressure on the inflation rate. The Euro also posted net gains to highs above 0.8580 as the single currency secured defensive support.

A tentative bounce in risk appetite helped underpin Sterling on Tuesday with a recovery to 1.3675 against the dollar while the Euro held firm. Global risk conditions will tend to dominate during the day, but there will also be caution ahead of Thursday’s Bank of England policy announcement.

The latest UK government borrowing requirement was higher than expected at £19.8bn for August with Sterling sentiment remaining notably cautious.




Swiss sight deposits edged lower to CHF714.7bn in the latest week from CHF714.8bn previously which does not suggest that the National Bank had been intervening significantly to weaken the franc in the latest week, but there will still be reservations over potential action to curb gains.

Weaker risk conditions underpinned demand for the Swiss currency. There was also renewed demand for gold during Monday which also had a significant impact in boosting demand for the franc. The Euro dipped back below the 1.0900 level while the dollar retreated to near 0.9275 as equity markets came under pressure.

The franc weakened only slightly on Tuesday with the Euro around 1.0885 as gold prices were unable to extend gains.


Technical Levels

Today's Calendar



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. This week’s focus is on USDCNH and the currency's trajectory as Chinese economies continues to show weakness despite stimulus attempts from the government and the PBOC.

FX Monthly Report August 2022

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we look into the EUR and the pressure the ECB is under to continue tightening monetary policy as USD continues to strengthen against major currencies. Economic data is weakening and inflation remains a concern. 

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.