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

Daily FX Report

Read disclaimer



The Euro advanced further in early Europe on Tuesday with a peak around 1.0735 against the dollar as hawkish ECB rhetoric continued to provide support. German PMI data was mixed with a weaker than expected reading for services at 56.3 from 57.6, but there was a slight beat for manufacturing at 54.6 from 54.3 in April. The Euro-zone PMI manufacturing index retreated to an 18-month low of 54.4 from 55.5 and slightly below expectations of 54.9 while the services-sector index was also below expectations at a 2-month low of 56.3 from 57.7. Cost pressures eased slightly, although output prices increased at the second-fastest rate on record.

ECB President Lagarde stated that markets should not translate words into percentage point moves, but also commented that the bank is attentive to the level of the Euro. Council member Holzmann stated that a 50 basis-point hike would be appropriate in July, but fellow member Villeroy stated that this was not part of the consensus. The Euro was subjected to a correction ahead of the New York open with a retreat towards 1.0700.

The US PMI manufacturing index retreated to a 3-month low of 57.5 for May from 59.2 and in line with expectations. There was, however, a steeper than expected decline in the services-sector index to a 4-month low of 53.5 from 55.6 and below consensus forecasts of 55.2. There was a net slowdown in new orders growth

Input prices increased at the fastest rate on record while prices charged also increased strongly with output prices increasing at close to the highest rate on record, although overall business optimism held firm. The dollar was subjected to renewed selling following the PMI data amid fresh reservations over the US outlook and the Euro advanced to 1-month highs near 1.0750. The Euro drifted lower to near 1.0700 on Wednesday with single currency support on the crosses slowing.




Treasuries edged higher in early US trading on Tuesday and there were further gains following the US PMI data with the 10-year yield declining to just above 2.80%. The yen secured additional support from renewed losses in equities and the dollar declined rapidly to lows below 126.50.

New home sales declined sharply to an annual rate of 591,000 from a revised 709,000 previously and substantially below forecasts of 750,000.

The Richmond Fed manufacturing index dipped sharply to -9 for May from 14 previously with negative readings for new and unfilled orders as well as shipments. Companies reported that skills shortages had intensified while inflation pressures increased. Although a relatively small survey, the data will raise concerns over the outlook with increased stagflation fears. Equites managed to pare intra-day lows and the dollar settled around 126.50. There were reservations over Chinese coronavirus developments, but US futures made headway on Wednesday and the dollar advanced to 127.20 before settling around 127.00 with the Euro just below 136.00.




The UK PMI manufacturing index dipped to a 16-mnth low of 54.6 for May from 55.8 the previous month and slightly below expectations of 54.6. Most attention focussed on the services sector with a sharp retreat to a 15-month low of 51.8 from 58.9 previously and well below consensus forecasts of 56.9.  There was a slowdown in orders growth with the sharpest slowdown with export sales under pressure. Cost pressures remained strong with input prices increasing at the fastest rate on record.

The rate of output prices slowed slightly amid weaker demand while overall business expectations dipped to 2-year lows.

Sterling dipped sharply following the data with increased fears over a sharp deterioration in economic conditions. The CBI retail sales survey provided a slight element of relief with a reading of -1 for May from -35 previously, although retailers expect a notable deterioration over the next three months.

Sterling still dipped below the 1.2500 level against the dollar with lows around 1.2470 before a rebound to 1.2530 as the dollar retreated again. The Euro posted strong gains to highs at 0.8590 before a correction to 0.8560. Fiscal policy will be watched closely with reports that there will be a mini budget to support households within the next few days and reaction to the Gray report will be watched closely. Sterling settled around 1.2530 on Wednesday with the Euro retreating to around 0.8540.




The Swiss franc posted net gains on Tuesday with reservations over the global outlook triggering defensive demand for the Swiss currency, while speculation over a more hawkish National Bank stance also provided net support to the franc.

The Euro settled just above the 1.0300 level while the dollar dipped to 1-month lows at 0.9575 before a recovery to 0.9600. The franc traded marginally lower on Wednesday amid expectations of higher global interest rates with the dollar around 0.9625. Central bank rhetoric will continue to be watched closely.

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. 

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.

FX Monthly Report June 2022

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we look into the JPY and the pressure the BOJ is under to change their monetary policy as JPY continues to weaken against major currencies. Economic data is weakening and inflation is less of a problem in Japan, but yields continue to test the cap.