EUROPEAN FX UPDATE: Buck still struggling to stop the rot

Analysis details (10:17)

DXY/JPY/CHF

The Greenback suffered another fall from grace on Thursday and succumbed to further selling pressure overnight when Japanese exporters are said to have been actively hedging following the Tokyo fix. Indeed, Usd/Jpy breached 136.00 to the downside and the Yen was also encouraged by softer US Treasury yields in contrast to JGBs that corrected higher in similar vein to the Franc that rebounded further through 0.9400 to circa 0.9325. However, the Dollar index derived some underlying support just under 104.500 amidst dip-buying in early EU trade to keep it afloat of Monday’s 104.100 w-t-d low within a 104.470-860 range awaiting PPI data and preliminary Michigan Sentiment for pre-weekend pointers before CPI and the FOMC next week. Accordingly, Usd/Jpy and Usd/Chf rebounded between 135.76-136.88 and 0.9235-68 respective parameters.

GBP/EUR

Both marginally firmer against the Buck, but off best levels and largely confined as Sterling straddled 1.2250 and the Euro formed a base near 1.0550 having narrowly failed to reach its weekly high closer to 1.0600 irrespective of a deeper retreat in EGBs compared to Gilts. 

NZD/AUD/CAD

The Kiwi was underpinned by mild Aud/Nzd cross tailwinds following mixed NZ data in the form of electronic card retail and manufacturing sales, with Nzd/Usd hovering beneath 0.6400 after a brief peer above the psychological round number, while the Aussie ran into resistance bang on 0.6800 vs its US rival and the Loonie lost impetus from oil and 1.3600+ status as WTI retested sub-Usd 71.50/brl lows.

SCANDI/EM

Softer than expected Norwegian headline and core inflation outweighed a rise in producer prices to keep the Nok depressed beneath 10.5000 against the Eur, and the Sek largely shrugged off Riksbank rhetoric to flit either side of 10.9000, while the Cny and Cnh took broadly in line Chinese CPI and PPI in stride as they pivoted 6.9500 vs the Usd in wake of a slightly higher than expected PBoC onshore reference rate and speculation that more measures aimed at propping up the real estate sector might be forthcoming.

09 Dec 2022 - 10:17- Fixed IncomeData- Source: Newsquawk