EUROPEAN FX UPDATE: Dollar pares post-NFP and Easter weekend gains

Analysis details (09:52)

DXY

The Greenback was already fading as other major financial centres returned from their extended Easter holidays, but broke even lower when Treasury peers caught up with the bearish price moves in reaction to the latest labour market report and an unusually active session on the corporate supply front for the first Monday after the long weekend. Moreover, the index lost momentum after failing to maintain 102.500+ status and the Buck breached a few technical/psychological props vs several major counterparts. As such, the DXY slipped towards 102.000 within a 102.510-110 range awaiting NFIB business optimism ahead of 3 year note issuance and speeches from Fed’s Goolsbee and Harker as current FOMC voters and both deemed to be neutral.

CHF/EUR/AUD/GBP/JPY

All taking advantage of their US rival’s retreat, with the Franc picking up the baton between 0.9099-38 parameters prior to weekly Swiss sight deposits showing hefty declines in domestic bank and total balances. Elsewhere, the Euro probed 1.0900 after finding support into 1.0850, the Aussie rebounded from sub-0.6650 to around 0.6679 with assistance from encouraging improvements in consumer and business sentiment plus a truce with China on some disputed issues lodged at the WTO, the Pound bounced from circa 1.2381 to 1.2445 and the Yen scaled 100 and 50 DMAs on the way back to the brink of 133.00 from 133.68. Note, Eur/Usd was relatively unimpressed with a better than consensus Eurozone Sentix index.

NZD/CAD/NOK     

The G10 laggards as the Kiwi was capped below 0.6250 against its US counterpart amidst Aud/Nzd headwinds either side of the 1.0700 handle, the Loonie straddled 1.3500 on the eve of the BoC and the Norwegian Crown hardly derived any impetus via hot headline CPI or a fractionally firmer than forecast core within a 11.4660-11.4050 band vs the Euro, as PPI decelerated sharply.

SEK/EM  

A pick-up in broad risk sentiment and inversion through parity against the Nok propped up the Sek, while the HKMA bought more Hkds to keep it pegged vs the Usd, the Zar piggy-backed Gold as bullion topped Usd 2000/oz, the Cnh/Cny took softer than expected Chinese inflation metrics largely in stride and the Krw was not unduly ruffled by the BoK pausing for a second time. Conversely, the Try was hit even harder by a much bigger than anticipated drop in Turkish IP and the Czk could not glean traction from CNB minutes revealing no easing on the horizon and only Holub dissenting in favour of a 25 bp hike instead of holding rates unchanged.

11 Apr 2023 - 09:52- Fixed IncomeData- Source: Newsquawk