EUROPEAN FX UPDATE: Yuan takes the strain as Buck strides higher again

Analysis details (10:40)

DXY

The Dollar index held a fraction above 111.000 and well off Thursday’s Japanese intervention pull-back low (110.460) before building another head of steam amidst more pronounced weakness in component currencies and elsewhere, including the Renminbi that extended losses through 7.0000 on a bearish combination of fundamental, technical and general risk factors. The DXY topped 112.000, marginally, at 112.120, with Sterling and the Euro among the hardest hit (or largest contributors to latest index gains) in wake of mostly worse than feared preliminary PMIs.   

AUD/NZD/GBP/EUR

Notwithstanding the aforementioned heavier Cable and Eur/Usd declines (former losing 1.1200+ status and latter letting go of the 0.9800 handle to test 1.1150 and 0.9750 respectively), the Aussie felt more contagion from the Yuan as Usd/Cnh popped over 7.1300 and Usd/Cny got to within a whisker of 7.1200. Indeed, Aud/Usd tumbled to 0.6577 irrespective of improvements in flash PMIs overnight, and the Kiwi fell in sympathy to probe 0.5800, even though the Aud/Nzd cross slipped back under 1.1350. Back to the Pound, and another spike in UK yields on the back of a far from fiscally balanced mini-budget prompted some short covering towards 1.1200 in Cable and 0.8700 in the Eur/Gbp cross.

CAD/JPY/CHF  

All weaker against their US counterpart, as the Loonie lost traction from crude and reversed around 1.3500 ahead of Canadian retail sales data, the Yen lost more recovery momentum in holiday-thinned volumes (Autumnal Equinox Day) between 141.76-143.08 parameters in the face of another bond rout and the Franc racked up more post-SNB losses beyond 0.9800.

EM   

Broad and deeper depreciation against the Usd in keeping with the Cnh and Cny, but some respite for the Inr after further RBI intervention, according to market reports.

23 Sep 2022 - 10:40- ForexData- Source: Newsquawk