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

Daily FX Report

Read disclaimer


The Euro was unable to make headway ahead of Wednesday’s New York open with further unease over the Euro-zone outlook. The IFO raised its estimates of German inflation to 5.1-6.1% for 2022 from the 3.3% forecast in December, emphasising the difficulties for the ECB in setting policy.

The Euro was also undermined by a fresh increase in energy prices during the day with Brent crude advancing to 2-week highs near $115 p/b. There was no evidence that peace talks between Russia and Ukraine were making any headway which maintained unease over euro-zone economic trends.

The Euro dipped back below the 1.1000 level ahead of the New York open amid expectations that underlying yield spreads would hurt the single currency.

Euro-zone consumer confidence dipped sharply to -18.7 for March from -8.8 previously which was below expectations of -13.0 and the weakest reading since May 2020.

The Euro did, however, find support just above Monday lows at 1.10960 and edged back to the 1.1000 level at the European close.

The dollar secured net gains on Thursday amid underlying yield spreads with the Euro around 1.0980 ahead of the Euro-zone PMI business confidence data for March.  Markets will also monitor energy prices very closely following President Putin’s demand that gas supplies are paid for in roubles.


US new home sales declined to an annual rate of 772,000 for February from 788,000 previously and below consensus forecasts of 810,000 with concerns that higher mortgage rates would sap demand.  US equity futures lost ground ahead of the New York open and Treasuries posted net gains with the 10-year yield retreating to near 2.35%. As yields declined there was also a significant dollar correction with a dip back below the 121.00 level against the yen.

Following the Finance Ministry’s comments on Tuesday, markets remained wary over the potential for verbal intervention from the Bank of Japan which tended to curb further yen selling, but there was still interest in funding carry trades through the Japanese currency. 

Cleveland Fed President Mester stated reiterated that frontloading interest rate hikes would better position policy going forward and that the Fed needed to make aggressive rate hikes earlier than later while she thought it would be necessary to do some 50 basis-point moves this year.

San Francisco head Daly also commented that the central bank is prepared to do whatever it takes to get price stability. She considers a neutral rate is around 2.5% and rates may need to go slightly above this level. St Louis Fed President Bullard stated that the central bank can run down the balance sheet faster than last time.

Japan’s PMI manufacturing index edged higher to 53.2 for March from 52.7 while the services index recovered to 48.7 from 44.2, but still in contraction territory while Bank of Japan member Kataoka stated that economic risks are skewed to the downside. The dollar strengthened to fresh 6-year highs at 121.70 on Thursday.


Sterling was unable to gain support from the higher than expected UK inflation data, especially as markets have already priced in a more substantial tightening of monetary policy by the Bank of England. In his fiscal statement, Chancellor Sunak announced a 5p per litre reduction in fuel duty and also announced a substantial increase in the National Insurance threshold of £3,000, but there were no other major measures to alleviate the immediate stresses on disposable income.

The OBR downgraded the 2022 outlook substantially with GDP seen increasing 3.8% compared with 6.0% previously. For the following two years, forecasts are now 1.8% and 2.1% respectively. Given high inflation, the OBR also stated that real living standards are set to decline 2.3% for 2022/23, the sharpest decline on record.

Markets had been expecting more substantial near-term relief measures which caused some further unease over the near-term outlook. Sterling did resist further losses and stabilised around 1.3200 against the dollar as US yields declined while the Euro advanced to 0.8330.

Sterling settled just below 1.3200 on Thursday with the Euro little changed as markets mulled the underlying UK and global economic outlook.


The Swiss franc resisted any selling pressure on Wednesday with the Euro retreating to around 1.0250 while the dollar also posted a net loss to 0.9315. There were further concerns over the Ukraine situation and equities edged lower which helped underpin the Swiss currency.

There are strong expectations that the National Bank will leave interest rates at -0.75% at the latest meeting, but there is also speculation that the central bank rhetoric will be less dovish, especially as Swiss inflation has increased. There is scope for choppy trading following the meeting with the dollar around 0.9325 in early Europe.

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.