EUROPEAN FX UPDATE: Dollar regains composure in advance of US CPI

Analysis details (10:23)

DXY

The Buck attempted to stop the rot and nurse some losses awaiting the remaining and potentially game-changing Midterm Election results, but not necessarily due to the fact that an overwhelming Republican victory in the House did not quite pan out as polls predicted or the prospect of a prolonged period before finding out which party prevails in the Senate.  However, the index held just above Tuesday’s low between 109.450-110.050 parameters as attention turned to US inflation data on Thursday and several key or significant levels in Greenback pairings continued to offer the Dollar underlying support. Prior to CPI, MBA weekly mortgage applications, comments from Fed’s Barkin and the last refunding leg provide distraction.

JPY/CHF/XAU

All off best levels, but retained a safety premium as the rout in crypto currencies raged on and the ripples reverberated across to stocks. The Yen straddled 145.50 within a 145.17-91 range, the Franc pivoted 0.9850 between 0.9874-25 and Gold probed the 200 DMA circa Usd 1715/oz.

NZD/GBP

The Kiwi and Pound underperformed or gave up more ground than other majors as the Buck bounced, with Nzd/Usd retreating through 0.5950 and Cable losing 1.1500+ status having faded fractionally shy of 1.1600 only yesterday. Nothing obvious in terms of negative NZ or UK factors, but cross headwinds may have adversely impacted as Aud/Nzd climbed from the low 1.0900 zone to top 1.0950 and Eur/Gbp from sub-0.8720 to around 0.8777.

CAD/EUR/AUD

A pretty blank domestic agenda and rangy WTI crude left the Loonie tracking its US rival and observing technicals as it meandered from 1.3413-53, while the Euro built a base beyond the 100 DMA, but was capped into 1.0100 again and the Aussie retreated through 0.6500 irrespective of rhetoric from RBA’s Bullock reaffirming guidance for further tightening given that inflation is too high and prices pressures are increasingly broad-based.

SCANDI/EM

Risk aversion and rather bleak FSRs from the Riksbank and Norges Bank weighed on the Sek and Nok, but the former gleaned some traction from decent Swedish industrial and household consumption data in contrast to the latter in the face of Brent slipping towards the 200 DMA. Elsewhere, more Covid angst for the Cny and Cnh and not much lasting from firmer than forecast Hungarian headline and core CPI for the Huf, while the Pln also traded on the backfoot pre-NBP even though a 25 bp hike is anticipated.

09 Nov 2022 - 10:23- Fixed IncomeData- Source: Newsquawk