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

Daily FX Report

Read disclaimer



According to flash data, the German PMI manufacturing index declined to 58.5 for February from 59.8 previously and slightly below consensus forecasts, but the services-sector index rebounded to 56.6 from 52.2 and well above market expectations.

The Euro-zone manufacturing index also edged lower for February, although output growth hit a 5-month high. There was a strong rebound for the services-sector index to a 3-month high of 55.8 from 51.1 and well above expectations of 52.2 as the Omicron impact proved short lived.

Although there was a slight easing of input cost inflation for manufacturing, overall costs increased at the second highest rate on record and average prices charges for goods and services increased at the fastest pace on record. The pricing data will maintain underlying concerns over inflation trends within the economy, but the Euro was unable to make further headway and stalled below 1.1400 against the dollar amid geo-political reservations.

In its latest monthly report, the German Bundesbank stated that the economy is likely to contract again in the first quarter of 2022 with a significant impact from pandemic-related absences from work. Industrial trends remained positive, however, and the central bank expects rebound in the spring.

The Euro lost ground during the day with unease over the Ukraine situation sapping support amid expectations that Russian President Putin would recognise separatist Ukraine regions of Luhansk and Donetsk. The dollar gained an element of defensive support and the Euro retreated to near 1.1300.

Ukraine tensions remained high on Tuesday with the Euro held close to 1.1300 as markets continued to monitor Russian military moves very closely.




US Treasuries were little changed on Monday, but US equity futures lost ground amid the US holiday. There were further concerns surrounding the Ukraine situation which was significant in providing defensive yen support with the dollar held below the 115.00 level.

After the European close, President Putin confirmed that separatist regions in Eastern Ukraine would be recognised and risk appetite remained on the defensive and the dollar dipped to just below 114.80, although the impact was limited by Wall Street closure.

There were fears that the move would lead to Russian forces entering the two regions and potentially trigger a further escalation in the conflict.

During the Asian session on Tuesday, there were reports that Russian forces had entered the region in what was described by Russia as a peace-keeping operation.

The US will announce further sanctions on Russia on Tuesday and overall risk appetite remained very fragile, although regional bourses did recover from intra-day lows.

The yen maintained a strong tone with the dollar around 114.70 against the Japanese currency and the Euro retreated to around 129.60.




The UK manufacturing PMI index was unchanged at 57.3 for February while the services-sector index strengthened sharply to an 8-month high of 60.8 for the month from 54.1 in January and above expectations of 55.7. New orders increased strongly on the month and employment increased at a faster rate. Input cost inflation remained high with the second fastest rate of increase in the services sector. There was a further strong increase in charges with the second-highest increase on record. The data underpinned expectations that the economy was rebounding quickly from the Omicron variant and that inflation pressures remained strong which also maintained expectations that the Bank of England would raise interest rates further.

Sterling was unable to gain further support with further rate hikes already priced in and risk appetite was also more vulnerable during the day. As equities lost ground and the dollar gained an element of defensive support, Sterling lost ground against the dollar with a fresh test of support below 1.36 against the US currency.

Risk appetite remained vulnerable on Tuesday with the UK currency trading just below 1.3600 while the Euro held above 0.8300 with a slight recovery to 0.8320.




Swiss sight deposits increased only marginally to CHF725.2bn in the latest week which again suggested that the National Bank had not intervened significantly to weaken the Swiss franc in the latest period which limited any potential selling on the domestic currency.

The franc gained further traction during Monday with on-going support from Ukraine tensions. The Euro retreated to lows close to 1.0350 against the franc while the dollar also dipped to lows near 0.9150. The Swiss currency maintained a robust tone on Tuesday as vulnerable risk conditions dominated.  


Technical Levels 

Calendar 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 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.