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

Daily FX Report

Read disclaimer


The Euro-zone current account surplus was unchanged at EUR18bn for October while the 12-month surplus increased to EUR311bn from EUR186bn the previous year, although there was still a net deficit on the financial account which would limit underlying support.

In its latest monthly report, the Bundesbank stated that the German economy may contract this quarter as a resurgence in coronavirus infections force fresh curbs on activity. It also expects that inflation will remain above 4.0% for the next few months.

The Euro was resilient ahead of the New York open with further evidence of a covering of short positions against major currencies, especially with fragile risk conditions. There was also some support from the ability to hold above the 1.1200 level against the dollar.

There were further concerns over developments surrounding Euro-zone energy prices as upward pressure continued. The sharp increase in costs will undermine activity as well as putting further upward pressure on inflation rates. This combination will make it even more difficult for the ECB to set monetary policy.

There were no significant US data releases during the day and no further commentary from Federal Reserve officials with markets also monitoring US Omicron developments. The Euro failed to hold above 1.1300 and drifted lower to 1.1280 on Tuesday as risk conditions again tended to dominate market moves.


US futures edged lower ahead of the New York open, but there was only a slight increase in yields and Treasuries rallied again as equities moved lower again after the Wall Street open. The 10-year yield held below 1.40% which limited US currency support.

The yen struggled to secure further significant support, but the dollar drifted lower against the Japanese currency with the dollar held below 113.50.

There were further doubts surrounding fiscal policy following Senator Manchin’s decision not to back the Biden Administration package. Wall Street equities did recover late in the session with the S&P 500 index closing 1.1% lower amid fragile risk conditions.

The Japanese government upgraded its assessment of the economy for the first time in 17 months which provided some reassurance. Overall risk appetite also recovered on Tuesday with a recovery in US futures helping to underpin regional bourses with Japan’s Nikkei 225 index gaining just over 2.0%.

Defensive yen demand eased slightly with the dollar trading around 113.75 while the Euro traded above the 128.0 level with net gains to 128.30.


The UK CBI industrial orders index edged lower to 24 for December from 26 the previous month, but this was above consensus forecasts of 20 and close to record highs with the index substantially above historic averages. Exports orders also slowed slightly while companies reported a further solid increase in output. Cost pressures remained strong for the month with only a slight slowdown in the rate of increase in prices.
There were further concerns over the near-term spending outlook with reports of a sharp decline in shopper number in London over the weekend.

Sterling dipped below the 1.3200 level with lows near 1.3170, but the ability to avoid fresh 2021 lows helped trigger a limited recovery. The UK currency was, however, unable to make significant headway, especially with global equity markets moving lower again.

Markets were continuing to monitor coronavirus developments and the potential for fresh regulations to help combat the Omicron variant. The UK government did not announce fresh restrictions on Monday, but unease over the risks remained high. The latest Lloyds Bank business confidence data held steady for December and wider risk appetite stabilised on Tuesday which lessened the threat of further selling. Sterling settled around 1.3215 against the dollar with the Euro near 0.8530.


Swiss sight deposits remained at CHF722.7bn in the latest week which suggested that the National Bank had not intervened significantly in currency markets during the latest week. The lack of intervention will continue to fuel expectations that the central bank will allow gradual franc appreciation over tome, especially as higher inflation rates outside Switzerland is weakening the Swiss currency in real terms. This decline will potentially accommodate nominal appreciation for the currency.

The franc also continued to gain underlying support from the very fragile tone surrounding risk appetite. The Euro settled around 1.0440 against the franc while the dollar dipped to test support below the 0.9200 level. There was little change on Tuesday with the dollar around 0.9220.

Technical Levels



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.

Weekly Report FX Options

Commentary and analysis covering OTC currency option pricing, volatility and positioning.

Daily Report Softs Technical Charts

Technical analysis and charts for the key sugar, cocoa and coffee contracts.

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?