EUROPEAN FX UPDATE: Kiwi and Aussie in breach of otherwise tight G10 ranks

Analysis details (09:45)

NZD/AUD

The Kiwi retained a firm grip of the 0.6100 handle vs its US rival and maintained gains against the Aussie with some impetus from an improvement in ANZ’s own activity indicator over an incremental deterioration in the business outlook. Nzd/Usd held near the upper end of a 0.6155-15 range and the Aud/Nzd cross retreated through 1.0800 again even though Aud/Usd survived another test of psychological support at 0.6600 before bouncing to 0.6635 alongside a partial recovery in the Yuan.

DXY/EUR   

Notwithstanding the outperformance down under, the Dollar regained composure in the run up to US GDP data and the index drew encouragement from the fact that it defended the 101.000 level when downside pressure intensified on Wednesday. Accordingly, the DXY clawed back a bit more lost ground between 101.280-470 parameters and the Euro was tethered around 1.1050 having set a new y-t-d pinnacle just shy of 1.1100 yesterday. Option expiries may have kept Eur/Usd capped or grounded given 1 bn at 1.1040 and the same size at 1.1000, though in truth much larger expiry interest rolling off yesterday failed to impede the headline pair.

CAD/GBP/JPY/CHF

The Loonie did not derive any independent direction from BoC minutes as the accounts merely reaffirmed guidance from the last policy meeting, so Usd/Cad continued to track overall risk sentiment and the fortunes of oil that turned very bearish of late. Similarly, Sterling was at the whim of external factors in the absence of anything UK-specific, while the Yen and Franc were both taken aback by the extended rebound in US Treasury yields. Usd/Cad meandered from 1.3616 to 1.3645, Cable from 1.2488 to 1.2457, Usd/Jpy gradually climbed from 133.40 towards 134.00 having scaled the 50 DMA and Usd/Chf crept up from 0.8904 to 0.8930.

SCANDI/EM  

Somewhat after the main Riksbank midweek event, Swedish GDP showed a smaller m/m contraction vs the previous month, slightly stronger Q1 q/q and y/y growth than expected to offset mainly weaker sentiment indicators and keep Eur/Sek relatively contained beneath post-dovish hike peaks, but Eur/Nok only topped out bang on a Fib retracement level after Norwegian retail sales missed consensus. Elsewhere, the Cnh and Cnh also pared losses largely on tech grounds as 200 DMAs were respected, while the Try traded defensively awaiting the CBRT amidst expectations for no change in benchmark rates.

27 Apr 2023 - 09:45- Fixed IncomeData- Source: Newsquawk