EUROPEAN FX UPDATE: USD broadly firmer vs. peers, AUD lags post-GDP

USD: DXY +0.1%; 106.48

• DXY a touch higher with the USD showing greater performance vs. JPY and the antipodeans. Recent Fed commentary has continued to talk up the possibility of a rate cut on 18th December, with such an outcome priced @ 73%. Markets will be looking for greater clarity from Fed Chair Powell later in the session who is due to speak @ 18:45GMT. However, bets may b e lacking in conviction until the release of Friday's NFP print. Today's US data slate includes US ADP, ISM services, Factory orders and the Beige Book. DXY currently sits within yesterday's 106.08-106.60 range.

EUR: EUR/USD -0.1%; 1.0501

• A touch softer vs. the USD ahead of today's French no confidence vote on PM Barnier's government; a motion Barnier is expected to lose. If this is the case, the next step goes to President Macron who could call a Presidential election (has said he won't) or attempt to find another PM. Elsewhere, in the Eurozone, ECB hawk Holzmann has noted that a 25bps cut is conceivable next week but no more than 25bps. Lagarde is due to speak @ 13:30GMT and 15:30 GMT but is unlikely to sway the 25bps vs. 50bps debate. EUR/USD has continued to pivot around the 1.05 mark and currently sits within yesterday's 1.0480-1.0535.


• EUR/USD opex: 1.0400 (1.8bln), 1.0425 (560mln), 1.0450 (830mln), 1.0465-75 (538mln), 1.0490 (550mln), 1.0525 (1.9bln), 1.0530-40 (773mln), 1.0575-90 (1.5bln).

JPY: USD/JPY +0.7%; 150.35

• JPY on the backfoot vs. the USD with USD/JPY continuing to chop around the 150 mark with prices consolidating after the recent declines in USD/JPY. For the JPY leg of the pair, focus remains on the December BoJ rate announcement. On which, pricing has now flipped in favour of an unchanged rate with such an outcome priced @ 63% vs. 42% at the start of the week.

GBP: GBP/USD -U/C; 1.2673

• GBP was briefly knocked lower in recent trade following dovish remarks from BoE Governor Bailey who stated that he sees four 25bps rate cuts in 2025. Note, market pricing ahead of his comments looked for three 25bps rate cuts next year. This view is based on recent positive developments on the inflation front, albeit there is "further distance to travel". Cable slipped further onto a 1.26 handle, tripping below yesterday's low @ 1.2637; Monday's low sits @ 1.2616.

Antipodeans: AUD/USD -0.9%; 0.6417. NZD/USD -0.7%; 0.5841

• AUD is the laggard across the majors following soft domestic Q3 GDP data overnight which has seen money markets fully price an RBA rate cut for the April 2025 meeting. AUD/USD printed a multi-month low @ 0.6409 overnight with the August 5th YTD trough @ 0.6347. NZD/USD is lower but to a lesser extent; session low @ 0.5832; next target comes via 27th Nov low @ 0.5827.


• AUD/USD opex: 0.6440-50 (1.7bln), 0.6500 (1.3bln), 0.6550 (650mln).

04 Dec 2024 - 10:20- ForexData- Source: Newsquawk