EUROPEAN FX UPDATE: Euro evades Greenback’s month end bid, but Yen gives in

Analysis details (10:15)

DXY/EUR/GBP/JPY

The Dollar regained some composure after Monday’s retreat that was prompted by a mixture of disappointing US data and waning bullish momentum, as the index held just above 104.500 again amidst residual rebalancing flow on the final trading session of February. However, the DXY quickly faded ahead of 105.000 as the Euro rebounded relatively firmly with the aid of above forecast Eurozone inflation data, including German import prices, prelim French CPI readings and an especially strong set of national and harmonised metrics from Spain. Meanwhile, the Pound extended post-NI Protocol agreement gains following a shallow pull-back towards 1.2100 vs the Buck and through 0.8800 against the Euro to test a recent peak that could be pivotal on a closing basis from a technical perspective, in stark contrast to the Yen that failed to remain afloat of key Fib support at 136.66 and looked destined to slide to 137.00 given broader weakness in Jpy crosses. Usd/Jpy rallied from the low 136.00 area after more dovish commentary from the incoming BoJ Deputy Governors and mixed Japanese ip and retail sales (former worse than feared and latter vice-versa).

NZD/AUD/CHF/CAD

All unable to resist their US rival’s partial revival, as the Kiwi retreated from circa 0.6171 to sub-0.6150 irrespective of welcome improvements in ANZ’s business outlook and own activity indices, and the Aussie faded from 0.6750 to 0.6705 even though final retail sales came in stronger than anticipated and the Q4 current account surplus was more than twice as wide as expected to more than offset a smaller than forecast net export contribution to GDP. Elsewhere, the Franc hovered beneath 0.9350, but kept afloat of 0.9400 following stagnant Q4 q/q Swiss GDP was countered by a more upbeat a timelier KOF indicator, and the Loonie meandered between 1.3605 to 1.3568 awaiting Canadian monthly and quarterly growth updates.

SCANDI/EM

The Sek narrowly missed breaching 11.0000 against the Eur as Swedish GDP fell short of the mark and PPI slowed to overshadow a considerable improvement in the trade balance to healthy surplus from small deficit, but the Try received some much needed good news as Turkish GDP exceeded expectations, the Czk was underpinned by stronger than forecast Czech PPI and the Cny/Cnh were comforted by a big PBoC liquidity boost as the latter held between 200 and 100 DMAs inside 6.9000-7.0000 bounds.

28 Feb 2023 - 10:15- Fixed IncomeData- Source: Newsquawk