EUROPEAN FX UPDATE: Aussie carries the baton further against the Buck

Analysis details (09:57)

AUD/NZD

The Aussie extended gains on the back of strength in base metals and breached some technical hurdles (10 and 21 DMAs in close proximity) on the way through 0.6750 to 0.6767 vs its US peer in the process, while the Aud/Nzd cross touched 1.0700 as the Kiwi continued to lag on bearish NZ fundamental factors, like the recent deterioration in business and consumer sentiment. However, Nzd/Usd reclaimed 0.6300+ status due to the Greenback’s latest retreat and another upturn in broad risk sentiment.

DXY

Aside from, or in addition to the Dollar’s underperformance vs the Antipodes, all index components rebounded amidst softer yields, renewed risk appetite and a general lack of other impulses to prompt moves outside the overall trend and direction. Hence, the DXY eased back from Wednesday’s recovery high to a marginally lower and new w-t-d low around the 104.000 axis within a 104.250-103.750 range awaiting US jobless claims and the final read of Q3 GDP for interim stimulus before PCE price metrics tomorrow as the Fed’s preferred inflation gauge.

JPY/EUR/CHF/CAD/GBP

The Yen continued to consolidate inside significantly tighter lines following its mammoth post-BoJ rally, with Usd/Jpy straddling 132.00 and capped by decent option expiry interest at 132.50 (1.03 bn), while forming a base above 131.50. Elsewhere, the Franc pivoted 0.9250, the Euro picked off a few more offers around 1.0650, the Loonie rotated either side of 1.3600 ahead of Canadian wage data and Sterling lagged circa 1.2100 after fading just under 1.2150 even before UK GDP metrics came in below consensus.

SCANDI/EM

Some macro props for the Sek and Nok to supplement retracements against the Eur, via a pick-up in Swedish ppi and retail sales on a m/m basis and declines in Norway’s labour force survey and registered jobless rates. Note also, forecasts from Sweden’s Government were not quite as bleak on the 2023 growth front as NIER on Wednesday, though more inflationary. On that note,Turkish President Erdogan announced a hefty increase in the net monthly minimum wage for next year from Try 5500 to Try 8500, adding to upside CPI pressures just ahead of the CBRT policy meeting that is expected to confirm an end to the easing cycle. Conversely, the Idr gleaned traction from the BI’s 25 bp hike and the Zar outperformed with ongoing support from Gold on the Usd 1800/oz handle.

22 Dec 2022 - 09:57- MetalsData- Source: Newsquawk