EUROPEAN FX UPDATE: Aussie and Loonie extend gains against Greenback

Analysis details (10:12)

AUD/CAD/DXY

The commodity bloc continues to derive strength from underlying prices, with the Aussie firmly underpinned by base metals, like iron ore that rebounded further overnight, while the Loonie gleaned more impetus via WTI crude reaching Usd 98.70/brl compared to a Usd 95.88 low and Monday’s Usd 93.01 trough. Aud/Usd probed Fib resistance ahead of 0.7000 at 0.6982 before fading as the Buck bounced broadly, but maintained momentum on the 1.1100 handle vs the Kiwi, while Usd/Cad slipped below 1.2820 and levels not seen since mid-June. However, the Dollar index regained some composure within range against other basket components in relatively quiet, light and cautious trade T-1 to the FOMC, as it held just above yesterday’s base (106.170) and popped over 106.500 between 106.190-600 parameters.

CHF/JPY

Not quite a case of all change, yet, but the Franc and Yen found some comfort in a sharp yield retreat through Friday’s already soft-looking levels, with Usd/Chf easing back from a little over 0.9650 and Usd/Jpy rotating around 136.50 in wake of Japan upgrading its economic outlook in the July report.

NZD/GBP/EUR

The Kiwi hovered under 0.6300 and pips above 0.6250 against its US rival with little notable reaction to RBNZ Governor Orr announcing that in addition to the remit review, the Bank will also review recent performance in conducting monetary policy, including an assessment of inflation and employment outcomes relative to targets. Elsewhere, Sterling waned after reaching 1.2090 and the Euro ran into resistance at 1.2050 with ongoing headwinds from the threat of recession, zero Russian gas supply, Italian political uncertainty and doubts over the application of the TPI.

SCANDI/EM   

No shock that the Nok got close to 10.0000 even vs the Eur given Brent’s revival to Usd 107.24/brl from Usd 104.34, but the Sek failed to get much leverage from a pick-up in Swedish PPI, while the Try weakened further in the face of higher crude prices, in contrast to the Zar that was encouraged by Gold establishing a platform within Usd 1728-1718/oz bounds.

26 Jul 2022 - 10:12- Fixed IncomeData- Source: Newsquawk