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

Daily FX Report

Read disclaimer



The Euro found some support just below 1.1400 against the dollar in early Europe on Tuesday, although it struggled to gain any traction and was held in tight ranges.

Markets continued to monitor ECB rhetoric. Council member de Cos stated that recent inflation data has shown a surprising upwards trend, although there is still a high degree of uncertainty over the outlook and inflation is not likely to remain above 2% over the medium term.

The US NFIB small-business confidence index declined to an 11-month low of 97.1 for January from 98.9 the previous month with only one of the indicators registered a monthly improvement. There was still evidence of a very tight labour market while a number of companies reported that inflation was the biggest problem. In addition, the number of companies increasing selling prices hit the highest level since 1974 which will maintain concerns over underlying inflation trends within the economy.

The US trade deficit widened to $80.7bn for December from $79.3bn the previous month, although this was below consensus forecasts of $83.0bn. For 2021 as a whole, the deficit widened to a record $859bn from $677bn the previous year and was equivalent to 3.7% of GDP.

Markets continued to monitor Italian yield trends closely during the day with concerns that any widening of yield spreads would undermine the Euro-zone outlook. There was also speculation that any further widening of peripheral spreads would prevent aggressive policy action by the ECB, especially given the need to avoid a tightening of financial conditions. Overall, the Euro consolidated close to 1.1420 at the European close as narrow ranges prevailed.

After the European close, ECB Council member Villeroy stated that the market reaction to the ECB may have been too strong which suggests further unease over the market moves seen since last week’s meeting. The Euro held firm on Wednesday and traded around 1.1425 against the dollar as commodity prices posted limited net gains with market concerns over the Ukraine situation also easing slightly. There will be further net caution ahead of Thursday’s US CPI inflation data.




After testing highs above 1.95%, US Treasury futures rallied ahead of the New York open, but there was renewed selling at the New York open with yields again probing multi-month highs. Yields again hit a ceiling close to 1.97% which held the dollar to around 115.55 at the European close. There was caution in Treasury markets ahead of Thursday’s US CPI data with market expectations that the annual rate will increase to 7.3% from 7.0% the previous month.

There was some relief over solid demand at the Treasury 3-year auction with most of the buying from overseas buyers.

San Francisco Fed President Daly stated that she backed a March rate increase and that inflation could get worse before it gets better, although she also noted that the Fed can’t be overly aggressive on rate increases. There will be further debate whether the Fed will sanction a 0.50% rate increase at the March meeting.

Asian equities posted net gains on Wednesday as risk appetite held firm. The dollar touched a 1-month high near 115.65 in Asia but failed to hold above 115.50 as US yields edged lower with the Euro around 131.90 as tight ranges prevailed.




Sterling posted a limited net advance ahead of Tuesday’s New York open with underlying support on yield grounds with expectations that the Bank of England rate hikes would underpin the UK currency as global investors switch funds towards currencies where nominal interest rates are expected to increase over the next few months.

Overall risk conditions held steady during the month with Wall Street indices posting limited net gains into the European close which curbed any potential Sterling selling.

The UK currency settled close to 1.3550 against the dollar while the Euro retreated to around 0.8430 amid a wider Euro retreat.

Markets will be monitoring comments from Bank of England chief economist Pill on Wednesday for further guidance on interest rates with Sterling holding a firm tone in early Europe as global equities made headway. The Uk currency traded just above 1.3550 against the dollar in early Europe with little change against the Euro.




The Swiss franc was able to resist losses in early European trading on Tuesday despite further upward pressure on global bond yields. The increase in Euro-zone yield spreads had some negative impact on the single currency and provided an element of protection for the Swiss currency.

The Euro drifted lower to 1.0560 while the dollar was unable to hold above 0.9250 and settled just below this level. The franc was marginally lower on Wednesday as markets continued to monitor global yield trends and central bank policies, although the dollar traded just below the 0.9250 level.


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 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.