EUROPEAN FX UPDATE: USD's post-election surge continues

USD: DXY +0.4%; 106.89

• DXY's bull run since the election has continued into today's session with DXY up around 3 handles since election day. 106.89 is the high print for today with attention on a potential test of 107. If breached, the 2023 high sits @ 107.35.


• Today's data slate sees the release of US PPI which will be used as an an input for PCE (the Fed's preferred inflation gauge), weekly claims data is also due. Fed speak includes Powell, Barkin, Williams & Kugler. Greater attention will naturally fall on Powell and how he views yesterday's inflation data. ING suggests that his refusal to tie Fed policy to Trump policy at this stage could make him appear more dovish than market pricing.

EUR: EUR/USD -0.4%; 1.0521

• EUR/USD's recent run of losses has extended with the pair slipping further onto a 1.05 handle with a current session low @ 1.0519 (fresh YTD low). The next obvious target for the pair is 1.05. If cracked, the 2023 low sits @ 1.0448.


• Looking ahead for the Eurozone, ECB's Lagarde and Schnabel are due to speak with attention on whether either guides markets towards a 25bps or 50bps rate cut next month. ECB minutes also due, however, will be viewed as stale.


• EUR/USD opex: 1.0390 (300M), 1.0500 (355M), 1.0550 (1.1BLN), 1.0560-70 (733M), 1.0575-85 (815M), 1.0590-00 (1.9BLN), 1.0625-35 (694M), 1.0650 (2.5BLN)

JPY: USD/JPY +0.4%; 156.04

• JPY softer once again vs. the broadly stronger USD. In terms of fundamentals for Japan, reports suggest that the nation is planning a JPY 13.5tln extra budget to fund its stimulus package. However, this has done nothing to turn the tide for the pair.


• USD/JPY has now crossed above the 156 mark for the first time since 23rd July with clean air until the 157 level. It is likely that Japanese officials will continue to attempt to jawbone the currency. However, this is likely to be unsuccessful. In terms of physical intervention, Japan last intervened on July 11th when USD/JPY was above 161.

GBP: GBP/USD -0.3%; 1.2671

• GBP lower vs. the USD for a 5th consecutive session. For now, this remains more of a USD story rather than one of pure GBP weakness. Today's UK data slate is light. However, BoE's Mann and Bailey are due to speak. Given the former spoke yesterday and struck a typically hawkish tone, greater interest will be on the latter. That being said, we did hear from Bailey last week at the MPR press conference so it remains to be seen what more he can add at this stage.


• GBP/USD has been as low as 1.2656 which is its lowest level since July 2nd; 1.2615 was the low that day.

Antipodeans: AUD/USD -0.3%; 0.6466, NZD/USD -0.3%; 0.5859

• Both antipodes are softer vs. the USD with AUD in focus following slightly softer-than-expected jobs data overnight. That being said, the release is unlikely to force the hand of the RBA into cutting rates in the immediate future. As it stands, markets do not fully price a 25bps rate cut until July 2025.


• AUD/USD is now down for a 5th consecutive session, printing a multi-month low @ 0.6460 with not much in the way of support until the 0.64 mark. NZD/USD sits at its lowest level since August 5th; 0.5849 was the low that day.

14 Nov 2024 - 09:55- ForexData- Source: Newsquawk