EUROPEAN FX UPDATE: DXY pulls back after four straight sessions of gains this week

FX

USD: DXY -0.2%; 106.48

• Pulling back after another surge on Thursday which saw a high of 107.07 (vs low 106.38), with hawkish Powell keeping the buck afloat in late hours.


• Fed Chair Powell struck a hawkish tone as he stated that the economy is not sending signals that the Fed needs to be in a hurry to lower interest rates; money markets now price in around a 63% chance of a 25bps cut in December versus 80% pre-Powell.


• Profit-taking cannot be discounted after DXY gained for four straight days this trading week thus far.


• Ahead, US retail sales and commentary from Fed's Goolsbee (2025 Voter, Dove), Collins (2025 Voter, Neutral), Williams (Voter, Neutral), and Barkin (2024 Voter, Neutral).


• DXY resides towards the bottom of a 106.47-106.96 parameter.

EUR: EUR/USD +0.3%; 1.0563

• Benefitting from a softer Dollar and seeing a rebound from yesterday's worst levels (1.0496 low) as the pair attempts to climb back to yesterday's best (1.0582).


• No tier-1 data slated for Europe; French Final CPI Y/Y revised slightly higher while M/M was unrevised - no price action seen in EUR at the time.


• EUR/USD OpEx: 1.0500 (3.2bln), 1.0550 (1bln), 1.0575-90 (800mln), 1.0600 (2.6bln), 1.0650 (1.1bln).


• EUR/USD currently resides in a 1.0524-1.0565 range.

GBP: GBP/USD U/C; 1.2661

• Relatively flat and unable to benefit from the pullback in the Dollar following downbeat GDP data across the board.


• UK GDP Prelim QQ (Q3) 0.1% vs. Exp. 0.2% (Prev. 0.5%), YY (Sep) 1.0% vs. Exp. 1.1% (Prev. 1.0%, Rev. 1.1%), MM (Sep) -0.1% vs. Exp. 0.2% (Prev. 0.2%).


• GBP/USD resides in a 1.2653-1.2690 range and within Thursday's 1.2627-1.2720 parameter.

JPY: USD/JPY -0.5%; 155.46

• The outperforming G10s after a week of underperformance with desks citing pre-weekend profit-taking, whilst Japanese GDP data mostly matched or topped estimates.


• Jawboning overnight saw Japanese Finance Minister Kato suggesting they will take appropriate action against excessive FX moves, while he added that one-sided, sharp moves were seen in the FX market and it is important for FX rates to move stably reflecting fundamentals.


• Some also attributed JPY's strength to reports that BoJ Governor Ueda is to deliver a speech and hold a press conference on Monday 18th, providing fewer reasons to hold onto JPY risk.


• USD/JPY overnight hit a fresh weekly high of 156.74 before pulling back to a current 155.40 low, with Thursday's trough at 155.32 and then Wednesday's low at 154.33.

Antipodeans: AUD/USD +0.3%; 0.6474, NZD/USD +0.4%; 0.5874

• Modestly firmer as DXY pulls back from its weekly highs, in turn offering some reprieve to peers alongside the base metals complex.


• Chinese Industrial Production disappointed but Retail Sales topped forecasts, while Chinese Home Prices showed a steeper Y/Y drop although the M/M decline moderated.


• AUD/USD rebounded after printing a 0.6439 low yesterday to trade in a current parameter between 0.6446-0.6475.


• NZD/USD sits in a 0.5839-0.5875 range as it eyes yesterday's 0.5888 peak.

15 Nov 2024 - 10:00- ForexResearch Sheet- Source: Newsquawk