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

Daily FX Report

Read disclaimer



The Euro was hampered to some extent by a further increase in French coronavirus cases. In comments on Thursday, ECB President Lagarde stated that the central bank has no need to act as fast as the Federal Reserve on monetary policy, although she also noted that the bank stood ready to respond if necessary.

There was evidence of divisions within the ECB minutes as a number of policymakers argued that inflation was at risk of over-shooting expectations. There were also comments that a higher for longer inflation scenario cannot be ruled out and the bank must be prepared to adjust policy in either direction.

US initial jobless claims increased sharply to 286,000 in the latest week from a revised 231,000 previously and well above consensus forecasts of 220,000. Continuing claims also increased to 1.64mn in the week from a revised 1.55mn and also above market expectations.

The Philadelphia Fed manufacturing index strengthened to 23.2 for January from 15.4 previously and above consensus forecasts of 20.0.  There were slightly stronger readings for shipments and new orders while employment continued to increase, although the rate of growth slowed. The prices paid index strengthened further on the month while there was a slight easing of upward pressure on prices received. Companies overall were more confident over the outlook with pricing pressures expected to remain very strong. The Philly Fed data offered reassurance over the outlook, but there were some reservations over the labour market after the claims data.

There was indecisive trading in early New York, but the dollar gradually recovered ground and posted stronger gains as risk appetite deteriorated with the Euro dipping to near 1.1300. Markets will monitor US-Russia talks over Ukraine on Friday with risk conditions having an important impact and the Euro was around 1.1330.




US Treasuries secured limited gains after the US jobless claims data with yields edging lower which limited potential dollar support.

Existing home sales declined to an annual rate of 6.18mn from 6.44mn previously. Lower US yields sapped near-term dollar backing and the yen was notably resilient despite a sharp rebound in equity markets.  In this environment, the dollar dipped to lows at 114.00 towards the European close.

Wall Street equities dipped sharply late in the session, although the dollar was able to hold above the 114.00 level.

Japan’s CPI inflation rate increased to 0.8% for December from 0.6%, but below consensus forecasts of 0.9% while the core rate was -0.7% from -0.6% previously.

Risk conditions dominated on Friday with net losses in US futures and Asian bourses. The yen secured renewed defensive support with the dollar retreating to lows near 113.60 before a slight recovery to around 113.85 while the Euro traded just below 129.0 as risk conditions dominated.




Latest data from the ONS suggested there had been a sharp dip in business activity in December, but there was evidence of a tentative rebound in the third week of January. There was also optimism that an easing of coronavirus restrictions would help underpin activity over the next few months.

Sterling held a firm tone in early Europe with further support from market expectations of a February rate hike, although around 35% of analysts are not expecting an increase. The UK currency also gained traction from a stronger tone surrounding risk appetite, although the FTSE 100 index lost ground during the day.

There were no substantive political developments during the day, although the overall atmosphere in Westminster remained extremely tense

Sterling moved above 1.3650 at the European close and the Euro dipped to fresh 23-month lows just above the 0.8300 level. The dollar recovered late in the day and a slide in equities after the European close sapped UK support with Sterling retreating to near 1.3600 against the dollar with a Euro recovery to 0.8330.

UK consumer confidence dipped to -19 for January from -15 previously. Retail sales slumped for December with a 3.7% monthly decline compared with expectations of 0.6% with a 0.9% annual decline from 4.7% previously. There was a muted reaction as risk conditions dominated with Sterling just below 1.3600 against the dollar.




The Swiss franc was resilient on Thursday despite firmer risk conditions with support from a dip in US bond yields. The Euro was held below 1.0400 and edged lower on the day while the dollar retreated to just below 0.9150. Markets remained wary over potential National Bank intervention, although there was also speculation that the bank would tolerate gradual franc gains given differentials in inflation rates. Markets were also monitoring Ukraine developments.

The Swiss franc maintained a firm tone on Friday as risk appetite remained fragile with the dollar held close to 0.9150.


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

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 EURPLN and the currency trajectory following the deteriorating economic outlook in Europe and rising rates in Poland.

FX Monthly Report May 2022

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we look at the current inflation outlook across LATAM, Europe, U.S. and U.K. and gauge if central banks will slow their rate hikes. Economic data is weakening and China's poor growth and woeful demand could impact policy makers' decisions. 

Quarterly Metals Report – Q1 2022

Our analysts provide in-depth analysis into the current macroeconomic conditions and how near-term choppiness may subside in the coming months, once the Fed has confirmed its stance on Monetary Policy. The backwardated spreads in the metals market outline the tightness, and the geopolitical tensions between Russia and Ukraine could compound tightness in Europe due to lower energy, metals, and grain exports.