EUROPEAN FX UPDATE: DXY lower and makes a fresh WTD low, JPY leads

DXY: -0.4%, 100.54

• DXY began the European session on a modestly weaker footing, continuing to pare back some of the US-China induced upside. As the session progressed, some hefty Dollar pressure was seen, as the risk tone deteriorated and with some traders pointing towards a technical driven move.


• To recap the move, the index initially held within a relatively busy 100.86-101.02 range, but saw some hefty selling pressure taking the index to a fresh 100.77 low; this move then continued to take the index to a 100.41 trough – a fresh WTD low. Further pressure could see a potential retest of the 100.00 mark, and then its 21 DMA at 99.74 thereafter.


• To recap the latest trade updates, White House Economic Adviser Hassett said the administration has more than 20-25 deals on the table with deals close to being finalised and when President Trump returns, he will announce the next deal, according to a Fox interview. Elsewhere, US President Trump said his relationship with China is good and he could see himself dealing with Chinese President Xi on a deal, according to a Fox News interview.


• The data releases docket is light today, with an absence of Tier 1 releases. Weekly US MBA mortgage applications data. On the speakers' slate, remarks are due today from the Fed's Waller (Voter, Dove), Fed Vice Chair Jefferson and Fed's Daly (2027 voter).

EUR: +0.4%, 1.1233

• EUR is on a firmer footing, largely benefiting from the broader Dollar weakness, rather than any EZ-specific updates, which have been lacking in today’s session. To recap, Spanish and German Final inflation figures were unrevised.


• It is worth noting that some traders have brought to focus a key technical level at 1.1214, which, once topped, saw some aggressive buying in the EUR which may have driven or at least added to the broader FX action seen in the European morning.


• The Single Currency has notched a fresh WTD high at 1.1251; 21 DMA at 1.1326 is next in focus.

USD/JPY: -0.7%, 146.43

• JPY is the best-performing G10 currency thus far; early morning strength was thanks to the broadly softer US yield environment, and with some modest deterioration in the risk tone (leading to broader Dollar weakness) USD/JPY managed to dip back below the 147.00 mark to a fresh low at 146.18 – a trough which coincides with its 50 DMA.


• Domestic updates include Corporate Good Prices (in-line) and a crashed Japanese training plane (awaiting further details).

GBP: +0.3%, 1.3342

• GBP is modestly firmer vs the broadly weaker Dollar, but is a little weaker vs EUR.


• Today has seen a few appearances from BoE members; starting with arch-hawk Mann, she noted that “UK labour market has been more resilient than expected. Worried that household inflation expectations have increased”. Elsewhere, Breeden released a text publication, but that focused more on supervision matters rather than on monetary policy. There was little price action sparked by both members.


• The Pound has firmly climbed above its 21 DMA at 1.3309, and trades at the upper end of a 1.3292-1.3358 range.

Antipodeans: AUD +0.3%, NZD +0.4%

• Antipodeans are modestly firmer vs the weaker Dollar; AUD/USD currently trading at the upper-end of a 0.6464-0.65 range; NZD/USD in a 0.5931-0.5968 parameter.


• Overnight saw the release of the Australian Wage Price Index, where both the Y/Y and M/M figures printed above expectations – metrics which sparked some two-way action in the Aussie.

14 May 2025 - 09:55- ForexEU Research- Source: Newsquawk