EUROPEAN FX UPDATE: several G10 rivals fairly resilient in face of Buck bounce

Analysis details (10:15)

DXY

More meander and churn rather than meaningful movement in most Dollar/major and other pairings, though the index and Greenback in general regrouped after retrenchment from post-US CPI peaks to form a base in DXY terms within a 109.570-920 range. Meanwhile, the Buck extended gains against some EM currencies to fresh multi-year peaks irrespective of further intervention and will be looking for further pre-FOMC direction from a packed data docket comprising Empire State and Philly Fed surveys, retail sales, jobless claims, ip, import and export prices.

AUD/NZD

A partial recovery in risk sentiment and macro releases underpinned the Aussie and Kiwi, with the former pivoting 0.6750 vs its US peer after a broadly in-line jobs report and the latter holding mostly above 0.6000 following stronger than expected NZ GDP metrics. However, Aud/Usd was hampered by another upturn in Usd/Cny-Cnh amidst ongoing China-US angst over Taiwan, and Nzd/Usd faced some Aud/Nzd headwinds ahead of the NZ manufacturing PMI.

CAD/EUR/GBP/CHF

All tightly bound against their US counterpart, as the Loonie derived some traction from relative stability in WTI crude, between 1.3184-53 parameters in advance of Canadian housing starts, while the Euro kept its head above 0.9950, and close decent option expiries (1.6 bn from 0.9990-1.0000), with little reaction to mixed Eurozone trade and labour costs. Elsewhere, the Pound retained 1.1500+ status, albeit just and shy of 1.1550, regardless of BoE/Ipsos inflation projections for the year ahead rising to highest levels since the series started in 1990, and the Franc traded within 0.9642–06 confines.

JPY

A much wider than forecast and fresh record Japanese trade deficit may have rattled the Yen, but the lack of tangible BoJ/MoF buying evidence allied to a firmer rebound in US Treasury yields were probably more instrumental in context of Usd/Jpy rebounding firmly from circa 142.79 to 143.80 at one point.

SCANDI/EM

The Sek and Nok retraced from midweek highs vs the Eur regardless of seemingly supportive specifics, such as a spike in one year Swedish money market inflation expectations and a significantly wider Norwegian trade surplus, while the Try failed to glean much support from a swing in Turkey’s budget balance from deep shortfall to small credit and the Cnh/Cny trod cautiously into Chinese activity data after the PBoC maintained its 12 month MLF and set another well below spot midpoint reference rate for the onshore Yuan.

15 Sep 2022 - 10:15- ForexData- Source: Newsquawk