EUROPEAN FX UPDATE: Greenback still labouring post-NFP

Analysis details (10:30)

DXY

The Dollar and index extended declines made in wake and on the back of Friday’s softer than forecast US wage data, factory orders and non-manufacturing ISM survey, with the Buck losing ground across the board and index retreating further below 104.000 between 103.860-420 parameters towards key technical support and its December low (103.380). However, a rebound in Treasury yields allied to some short covering helped the Greenback bounce from worst levels ahead of employment trends, consumer credit and the next major macro release on Thursday in the form of CPI.   

AUD/NZD/GBP

No real surprise that the activity and cyclical currencies took most advantage of the Greenback’s deeper demise, as the Aussie advanced above 0.6900 and only stalled approaching 0.6950, while the Kiwi peered over 0.6400 before waning and the Pound paused around 1.2174 having regained 1.2100+ status irrespective of IMM spec accounts increasing short positions for a second time in six weeks.

CAD/EUR/CHF/NOK

The next best G10s, and the Loonie leading the bunch following a blockbuster jump in Canadian payrolls compounded by renewed strength in WTI crude prices on the China reopening from Covid restrictions bandwagon. Usd/Cad retreated through 1.3400 ahead of building permits, while the Euro touched 1.0700 before fading and hardly reacting to the latest ECB bulletin flagging very strong pay growth over the next few quarters in the services sector especially. Elsewhere, the Franc shrugged off mixed Swiss jobless rates and another drop in sight deposits at domestic banks as it climbed from circa 0.9286 to 0.9216 and the Norwegian Crown bounced from around 10.6700 against the Euro with some traction from Brent awaiting CPI metrics on Tuesday.

JPY

The aforementioned easing in USTs and lack of Japanese participation due to the Coming of Age holiday saw the Yen reverse from 131.31 to 132.57 and remain below a Fib retracement level at 132.15 in advance of inflation data.

SEK/EM

Moderate Sek underperformance around 11.1900 vs the Eur, but the Cny and Cnh gathered momentum off a robust PBoC fix towards 7.7600 against the Usd before reports that China is considering a record special debt quota and wider budget deficit, while the Brl may be prone to adverse political press amidst protests staged by supporters of ex-Brazilian President Bolsonaro, and the Huf lagged following much weaker than forecast Hungarian ip and a wider than anticipated trade deficit.

09 Jan 2023 - 10:30- Fixed IncomeData- Source: Newsquawk