EUROPEAN FX UPDATE: Yen depreciation almost unrelenting and unchecked

Analysis details (10:32)

DXY/JPY

The Greenback remains somewhat leggy above the 100.000 level in index terms, or perhaps rather reluctant to push much further ahead of key US data in the form of CPI on Tuesday. However, the Buck continues to rally almost incessantly against the Yen as the BoJ maintains its policy accommodation in contrast to the Fed and exacerbates the divergence between JGBs and Treasuries. Hence, after holding below 125.00 since rallying to a prior 2022 peak around 125.10 on March 28, Usd/Jpy has now been up to circa 125.44 and not far from the next set of exporter offers that are likely to be sitting at 125.50. Back to the Dollar and DXY that is sitting between 100.050-99.726 parameters, near term direction may come from a trio of Fed speakers, starting with Bostic, then Williams and Evans.

EUR

At the other end of the G10 spectrum, some respite for the Euro and a return to 1.0900+ terrain vs its US peer in wake of the first round of French Presidential election votes on Sunday that saw current incumbent Macron top the polls and Le Pen come in second to set up what is predicted to be a keenly contested run-off on April 24. Nevertheless, Eur/Usd is well off best levels having popped to 1.0950 or so and the technical landscape remains bearish after the pair closed below a key Fib level last Friday (1.0895).

AUD/CAD  

In contrast to the above, political uncertainty may be hampering the Aussie along with a downturn in risk sentiment, as PM Morrison announced a general election for May 21 overnight and early polls suggest that his main opposition party has more support at present. Aud/Usd is sub-0.7450 and not far above a new post-RBA low, while the Loonie is still pivoting 1.2600 amidst more pronounced weakness in crude and relying on chart support (200 DMA) to contain declines before the BoC on Wednesday.

CHF/GBP/NZD

The Franc is also in familiar territory against its US counterpart, but softer vs the Euro following latest weekly Swiss sight deposit balances showing a rise in the accounts at domestic banks, while Sterling has regained some poise after a post-UK GDP and trade data tumble awaiting labour metrics on Tuesday and inflation the next day, and the Kiwi is looking towards the RBNZ on Wednesday for independent direction. Usd/Chf is just under 0.9350, Eur/Chf is beneath 1.0200, Cable is in the low 1.3000 zone and NZD/Usd is midway within a 0.6856-13 range.

SCANDI/EM

Double whammy for the Nok as Brent straddles Usd 100/brl and Norwegian inflation readings came in below consensus, headline CPI especially, but stronger than forecast Chinese CPI and PPI are helping the Cnh and Cny contain losses. Elsewhere, the Zar is firmer in line with Gold through Usd 1950/oz, while the Ils is braced for a Bank of Israel rate hike announcement in the pm session.

11 Apr 2022 - 10:32- Fixed IncomeData- Source: Newsquawk