EUROPEAN FX UPDATE: Greenback idles, Yen stalls and Kiwi in reverse

Analysis details (09:55)

DXY

Some respite for the Dollar and largely thanks to the Yen finally running out of steam after extending its post-BoJ resurgence to even loftier levels yesterday. However, the rot far from stopped for the Buck as bleak winter factors continued to weigh and cap or trap the index within narrow confines either side of 104.000 (from 104.160 to 103.890 specifically) ahead of more US housing data and consumer confidence.

NZD/GBP

While the Yen cooled off as noted above, focus shifted somewhat and to the Kiwi in view of its sizeable losses after another worrying NZ sentiment survey overnight (consumer morale fell appreciably to compound recession concerns). Nzd/Usd reversed from around 0.6350 to sub-0.6300 and the Aud/Nzd cross rebounded from the low 1.0500 zone to probe 1.0600 with little reaction to a slightly narrower than previous trade deficit along the way. Conversely, Sterling failed to glean much encouragement from a decent rise in Lloyds’ UK business barometer before the ONS published public finance balances for November that showed a bigger than forecast ex-banks shortfall and the highest borrowing requirement for the month in question ever. Cable waned just shy of 1.2200 and subsequently in  1.2150 awaiting CBI distributive trades for further direction.

EUR/CHF/CAD/JPY/AUD

All sitting tight against their US rival in comparative calm following Tuesday’s Yen-related stormy conditions, with the Euro entrenched between 1.6037-07 bounds, the Franc flitting from 0.9251 to 0.9289, the Loonie pivoting 1.3600 within a 1.3625-1.3589 range pre-Canadian CPI, the Yen straddling 132.00 inside 132.37-131.50 parameters having reached circa 130.56 on the back of the wider YCC remit, and the Aussie hovering beneath 0.9700 and above 0.6650. 

SCANDI/EM

A recovery in overall risk appetite helped the Sek and Nok pare some declines rather than conflicting Swedish sentiment indicators or revised NIER forecasts given that 2023 inflation was upgraded and GDP downgraded to convey more pronounced stagflation. Elsewhere, the Cny and Cnh were undermined by ongoing Covid uncertainty even though there were no reported deaths yesterday, as China announced plans to lift isolation rules for foreign visitors with effect from January 3rd, while the Czk was cautious in advance of the CNB irrespective of the fact rates are widely expected to remain unchanged.

21 Dec 2022 - 09:55- ForexData- Source: Newsquawk