EUROPEAN FX UPDATE: Buck bounces broadly, but not quite uniformly

Analysis details (10:17)

DXY/JPY/EUR

Further consolidation within familiar ranges for the most part, as the Greenback regrouped following Thursday’s post-US jobless claims and Philly Fed relapse and the Dollar index regained traction around the pivotal 102.000 level. However, the Yen bucked the overall trend in wake of Japan’s national CPI data showing considerably stronger than expected ex-fresh food and energy inflation, with Usd/Jpy also offered amidst export offers and pre-weekend position squaring that spread to Yen crosses. Indeed, Eur/Jpy remained capped even though the Euro was underpinned by a rebound in EGB yields on the back of  stronger than forecast Eurozone services and composite PMIs outweighing manufacturing misses, plus more concerns raised by ECB members about core prices (de Guindos and Visco latest). Usd/Jpy reversed between 134.28-133.71 parameters, Eur/Usd pivoted 1.0950, close to 1.2 bn option expiries at 1.0970-80, and the DXY held a relatively tight 102.070-101.750 line awaiting the US preliminary PMIs.

CHF/CAD/GBP/NZD/AUD   

All making way for the latest Buck bounce, albeit to varying degrees, with the Franc keeping mainly afloat of 0.8900, but the Loonie back under 1.3500 in advance of Canadian retail sales against the backdrop of ongoing weakness in crude and other commodities, the Pound struggling to stay close to 1.2400 where the 21 DMA sat, the Kiwi sub-0.6150 and the Aussie underperforming below 0.6700, in part due to a deeper plunge in iron or prices. Back to Sterling, and the damage was done early when UK retail sales fell more than forecast and Eur/Gbp breached the 50 DMA (at 0.8817 today), with no real pullback in the cross even though flash PMIs followed a very similar pattern to their EZ counterparts.

SCANDI/EM

The Nok lurched even lower towards 11.7000 against the Eur as Brent probed Usd 80.50/brl to the downside, while the Zar was undermined by Gold losing grip of the Usd 2k/oz handle again and the Cnh/Cny retested psychological and technical support vs the Usd around 6.9000 as China-Taiwan angst rumbled on.

21 Apr 2023 - 10:17- Fixed IncomeData- Source: Newsquawk