EUROPEAN FX UPDATE: DXY a touch firmer, GBP little changed after UK shows no growth in Q3

DXY: +0.1%, 107.92

• DXY is slightly firmer and currently trades towards the upper end of a 107.68-99 range, just shy of the round 108.00 mark, but still someway off Friday’s best at 108.54. Given the recent run over the past week, there is little of note by way of DMA levels; if some pressure returns to the index, a potential test of Friday’s 107.58 low could be seen.


• Over the weekend, the US Government averted a shutdown, but does not include President-elect Trump’s proposal to raise the federal borrowing limit, according to BBC; the next set budget deadline is just three months away.


• Docket ahead: US durable goods data for November is expected to slip 0.2% M/M, while US new home sales are expected to rise to a rate of 670k from 610k in November. The Conference Board's gauge of consumer confidence is seen rising to 113.0 in December from 111.7 in the previous month. The Chicago Fed will release its November National Activity Index.

EUR: -0.2%, 1.0413

• EUR is incrementally softer vs the Dollar and also losing vs the GBP; EUR/USD currently holds towards the upper end of Friday’s 1.0342-1.04471 range; upside level includes Wednesday’s high at 1.0512 which coincides with its 21 DMA.


• German Import Prices printed above expectations though ultimately sparked little move in the Single-Currency. ECB’s Lagarde told the FT that she “still believe that ECB should be very vigilant about service”; overall adding little new to the docket.

JPY: +0.1%, 156.63

• JPY is incrementally lower, with USD/JPY sitting within a very tight 156.33-80 range, given the holiday-thinned conditions. If some pressure appears in the pair, could see a test of Friday’s low at 155.94.


• A Barclays FX head Daga said, “we have seen hedge funds buying outright USD/JPY calls or digital with a view of the currency pair rising to 160-165 range despite warnings by Japan’s finance minister and the Ministry of Finance”, via Bloomberg.

GBP: U/C, 1.2574

• Cable is flat and currently trades within a 1.2554-1.2588, a little short of the 1.26 mark. Further upside could see a test of Friday’s best at 1.2613 and then its 21 DMA at 1.2659 thereafter. From a macro perspective, the UK posted its Q3 GDP metrics, which saw the YY and QQ both revised a touch lower, with the QQ figure showing no growth within the period. Figures which had little impact on the Pound.


• BoE Governor Bailey and FCA CEO Nikhil Rathi will reportedly join UK Chancellor Reeves as part of Britain’s delegation to China next month, according to Sky News.

Antipodeans: AUD +0.2%, NZD +0.1%

• Antipodeans are very modestly in positive territory, with modest outperformance in Aussie. The Aussie holds towards the upper end of Friday’s 0.6214-0.6274 range; NZD is also a little firmer, and holds around 0.5660.

23 Dec 2024 - 10:00- ForexEU Research- Source: Newsquawk