EUROPEAN FX UPDATE: Pound perky-post UK data and Dollar vice-versa

Analysis details (10:16)

DXY/GBP/JPY/CHF/EUR

The Buck survived a test of more key levels to keep the index afloat around the 108.000 axis and just above Monday’s 107.800 low within a 107.930-108.290 range, with Sterling a notable gainer on mostly stronger than expected UK labour metrics, including wages and a decline in the unemployment rate to near half century lows, while the Yen continued its correction to almost 142.00 against the Greenback, irrespective of mixed Japanese PPI prints. However, Cable ran into resistance circa 1.1732 and close to a Fib retracement, while the Franc failed to clear 0.9500 convincingly following a y/y slowdown in Swiss Producer and Import prices and the Euro faded at 1.0160 with decent option expiry interest between 1.0170-80 (1.21 bn) capping the upside ahead of US CPI. Note, Eur/Usd was also hampered by another bleak German ZEW survey and dire update from the Economy Ministry (latter noting that the outlook for H2 has deteriorated dramatically).  

CAD/AUD/NZD

All firmer vs their US counterpart, but the Loonie holding just below yesterday’s 1.2970+ peak, the Aussie still finding 0.6900 tough to fully breach 0.6900 regardless of an improvement in NAB business confidence amidst steady conditions and a rise in Westpac consumer sentiment, and the Kiwi stalling around 0.6150 pre-NZ current account balances.

SCANDI/EM

Some slippage for the Sek and Nok in the face of less supportive or strong risk-on positioning, while the latter also took on board a rather downbeat Norwegian Regional Network Survey revealing an acceleration in price pressures that weighed on activity through the Summer months. Elsewhere, the Cny and Cnh could not sustain momentum off another firmer than anticipated PBoC midpoint fix on return from China’s Mid-Autumn Festival break due to new Covid restrictions in Sanhe near Beijing and Shijiazhuang city in the province of Hebei and the Try remained under pressure after a marked slowdown in Turkish IP. Conversely, the Czk gleaned traction via a considerably narrower than consensus Czech current account deficit, the Zar coped well with more Eskom load-shedding and the Inr extended CPI inspired gains with impetus from India’s chief economic advisor who declared that the country is not defending the currency as the Rupee can take care of itself.

13 Sep 2022 - 10:16- Fixed IncomeData- Source: Newsquawk