EUROPEAN FX UPDATE: majors roam in familiar ranges a day after Thanksgiving

Analysis details (10:01)

DXY

The Dollar derived some support from a deeper retreat in US Treasuries and more pronounced bear-steepening, but the index remained sub-104.00 in tight 103.84-62 confines and the Buck mostly softer against basket components awaiting preliminary PMIs for further direction on the Friday following Thanksgiving. Of key interest, whether the headline readings retain 50.0 handles given that manufacturing was bang on the threshold last time, with services and composite indices only just in expansion territory.

NZD/AUD/GBP  

A couple of positives for the Kiwi via confirmation that NZ's National, First and ACT parties signed a coalition agreement to form a government, while incoming PM Luxon said the Reserve Bank Act will be amended to focus monetary policy on price stability alone and retail sales defied expectations for a decline by coming in flat. In response, Nzd/Usd held mostly above 0.6050 and the Aud/Nzd cross drifted south of 1.0850 even though the Aud/Usd retained 0.6550+ status. Elsewhere, the Pound benefited from UK-US/EZ differentials as Gilts and the Sonia strip outperformed in yield and implied rate terms, enabling Cable to probe recent peaks on the way to 1.2565 and Eur/Gbp test the 50 DMA at 0.8587.

EUR/CAD/JPY/CHF

The Euro remained tethered to 1.0900 against the Greenback amidst more hefty option expiries and failed to glean upside impetus from the latest German Ifo survey as improvements in the business climate, current conditions and expectations all fell a tad short of consensus, Hence, Eur/Usd was contained between 1.0896-1.0920 parameters and inside a cumulative 2.4 bn expiry interest staring at 1.0895 and ending at 1.0930. Meanwhile, the Loonie straddled 1.3700 ahead of Canadian retail sales, the Yen pivoted 149.50 as the aforementioned downturn in USTs compounded slightly softer than forecast Japanese CPI metrics and mixed PMIs, and the Franc was largely sidelined within a 0.8848-30 band.

SCANDI/EM

A deterioration in Turkish manufacturing sentiment hardly helped the Try as it retreated from its post-CBRT recovery peak, irrespective of the EBRD President saying it is on track for the highest ever investment within Turkey this year, but the Huf retained some momentum after the EC approved Hungary's updated recovery plan that paved the way to an Eur 10.4bn advanced payment under the RepowerEU plan yesterday. Conversely, the Cnh and Cny could not sustain gains made on the premise of more Chinese aid for the ailing property or an even bigger PBoC midpoint fix skew.

24 Nov 2023 - 10:01- Research Sheet- Source: Newsquawk