EUROPEAN FX UPDATE: majors mixed and rangy, as trade remains cagey

Analysis details (10:19)

DXY

The Dollar index settled into a narrower range between 104.170 and 104.510 awaiting further direction that could come from US new home sales data or Fed speakers, Bullard and Daly, rather than final UoM survey findings on Friday, barring any major revisions to the latter. In the interim, the Buck moved mostly sideways and well within recent wider parameters against G10 and other counterparts, eyeing overall risk sentiment and Treasury yields in relation to global peers.

NZD/JPY/EUR

A bit of an odd mix, but all slightly firmer vs their US rival and highlighting the somewhat random currency moves and positioning at present. The Kiwi may actually be benefiting from favourable Aud/Nzd tailwinds over a long NZ holiday weekend as the cross retreats towards 1.0950 and Nzd/Usd hovers around 0.6300, while the Yen is holding the bulk of its impressive recovery gains, albeit stalling ahead of Thursday’s high circa 134.27 that also coincides with a Fib retracement level (23.6% of the rally from 126.37 to 136.71). Elsewhere, the Euro is holding above 1.0500 as EGBs retreat from fresh peaks in wake of not as bad as perhaps could have been German Ifo metrics given the dour PMI readings yesterday. In short, the business climate and current conditions were narrowly mixed against consensus, but expectations fell some way short.

CAD//AUD/GBP/CHF

The Loonie still appears wary about another and deeper plunge in crude prices, but managed to contain losses sub-1.3000, the Aussie continues to pivot 0.6900, Sterling maintain 1.2200+ status irrespective of mixed UK macro releases (retail sales not as weak as forecast on a m/m basis in contrast to y/y and Gfk consumer confidence at a record low) and more pain for PM Johnson, as the Tories lost both by-elections and Conservative Party Chair Dowden stood down in response. Meanwhile, the Franc remains tethered around 0.9600, though gradually firming vs the Euro through 1.0100 following more hawkish SNB guidance.

SCANDI/EM

Some respite for the Sek and Nok on less fraught and averse risk grounds, while the Cny and Cnh maintained corrective momentum with assistance from a net PBoC liquidity injection overnight and the Mxn is extending post-Banxico positivity due to hawkish guidance accompanying the 75 bp all time largest hike. Similarly, the Inr gleaned some traction from latest remarks by RBI Deputy Governor Patri noting that core inflation measures are showing signs of generalisation and warrant monetary action, adding that the Bank is likely to miss its inflation target for three straight quarters.

24 Jun 2022 - 10:19- Fixed IncomeData- Source: Newsquawk