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

Daily FX Report

Read disclaimer



The German trade surplus narrowed to EUR6.8bn for December from EUR10.8bn the previous month with a further strong increase in imports on the month. The Euro edged higher into the New York open with markets continuing to assess underlying monetary policy developments.

Bundesbank head Nagel stated that he would advocate more to normalise monetary policy if the inflation picture does not change by March. He added that the costs of acting too late are significantly higher than acting too early. The overall commentary was notably more hawkish than comments from other key ECB officials over the past few days, but there will inevitably be a wide divergence in views within the council as the internal debate continues.

ECB council member Schnabel commented that the central bank will act accordingly if it believes that inflation will remain above target over the medium term.

The dollar edged lower after the New York open with significant losses against commodity prices as equity markets posted strong gains. In this environment, the Euro was able to secure a limited net advance, but narrow ranges prevailed.

Narrow ranges prevailed ahead of Thursday’s US CPI inflation data with the Euro settling around 1.1430 against the US currency. Markets expect the headline rate to increase to a fresh 39-year high of 7.3% from 7.0% with some scope for a weaker dollar if the rate is below expectations. A stronger than expected release would reinforce speculation that the Federal Reserve would tighten more aggressively at the March meeting with choppy trading likely after the release.




US bond yields edged lower ahead of Wednesday’s New York open, although the moves were limited and yields edged higher again at the Wall Street open.

Atlanta Fed President Bostic stated that he hoped inflation would start to decline soon, although he also commented that he was leaning towards four rate hikes for this year compared with his previous assumption of three increases with inflation this year likely to be around 3%.

Cleveland Fed President Mester stated that she expects inflation to moderate based on the central bank taking appropriate action and that conditions warrant a balance sheet reduction soon and at a faster pace. She also commented that the impact of Omicron is likely to be minor and transitory.

Markets were on alert for Bank of Japan action to curb the increase in domestic yields. Governor Kuroda stated that the chances of a large jump in inflation are low and that there was no chance that the bank will reduce easing at this stage. The dollar edged higher to 115.65 in early Europe on Thursday and close to 1-month highs.




Sterling edged higher ahead of Wednesday’s New York open although it was unable to make a challenge on 1.3600 against the dollar. Bank of England chief economist Pill stated that its better to adopt a measured approach to monetary policy as rapid moves can give misleading messages and amplify volatility. He also noted that it had been a close call between a 0.25% and 0.50% rate hike this month and that he would not want to exclude rate adjustments of more than 25 basis points. Wage trends will be important and noted that a tighter than expected monetary policy might be needed if there is evidence of second-round effects in wage and cost developments. The overall message, however, was that gradual rate increases are will be preferred over the next few months.

Sterling was unable to gain further support from Pill’s comments with reservations over the Brexit situation also a significant element as Prime Minister Johnson repeated the threat to suspend Article 16 if there was no headway on the Northern Ireland protocol.

Sterling continued to drift lower into the European close with a retreat to 1.3540 against the dollar while the Euro edged higher to 0.8440.

Latest data indicated that the labour market is still tight and the RICS house-price survey recorded an increase to 74 from 70 previously amid further supply difficulties. Narrow ranges prevailed on Thursday with Sterling around 1.3535 against the dollar and the Euro around 0.8440.




The Swiss franc was broadly resilient on Wednesday despite strong gains in global equity markets and underlying upward pressure on bond yields. Markets were continuing to monitor trends in peripheral yield spreads, ECB rhetoric and National Bank policies.

The Euro edged higher to the 1.0560 area while the dollar was unable to make headway with a slight net loss to near 0.9235. There was little change on Thursday as overall ranges remained narrow with the dollar held below the 0.9250 level as global yields stabilised.

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.