FX Morning Colour: Euro finds a few admirers, but Rand the most attractive

EUR

Still out of favour in the G10 arena, but the single currency has regained some composure after extending losses across the board and perhaps deriving a degree of comfort from preliminary German Q4 GDP just evading contraction plus broadly firmer than forecast pan Eurozone prints alongside employment readings. Eur/Usd has clawed back from deeper sub-1.0900 lows after arresting its slide just above the next line of technical support ahead of 1.0800 around 1.0821, while Eur/Gbp has defended 0.8300 again. However, the headline pair needs to reclaim Fib retracement levels over 1.0850 to really become loved again.

USD

Amidst extremely narrow confines vs most major counterparts, the Dollar remains largely dependent on others for direction ahead of a raft of US data including retail sales and ip in advance of preliminary Michigan sentiment having derived little if any independent impetus via Thursday’s CPI metrics. Hence, the DXY is still tethered to the 99.000 anchor, albeit after inching to another fresh 2020/multi-month apex at 99.166 and slightly closer to next upside chart hurdle protecting last year’s peak (99.249 and 99.667 respectively).

CAD/AUD/GBP/JPY/NZD/CHF

The Loonie and Franc are marginal outliers flanking the aforementioned tightly bound trade against the Greenback, as Usd/Cad breaks below 1.3250 more convincingly against the backdrop of firmer oil prices that are also helping the NOK pare losses vs the recovering Eur more than the SEK. However, Usd/Chf has crossed 0.9800 and Eur/Chf is firmer above 1.0600 in wake of mixed Swiss producer/import price data. Meanwhile, the Aussie and Kiwi are both consolidating off this week’s post-RNBZ rebound highs and hovering near 200 HMAs (0.6720 and 0.6444 respectively), and similarly the Yen continues to meander between 109.90-75, but with decent options either side (1.7 bn from 109.70-80 and 1.1 bn at the 110.00 strike). Last, but by no means least, Sterling has paused for breath after yesterday’s UK cabinet reshuffle exertions with Cable respecting resistance again at 1.3070 and drifting back under 1.3050, partly on cross flows due to the Eur/Gbp bounce noted above.

EM 

The Zar is clearly outperforming across the region and in wider circles with news that SA’s Eskom plans no load-shedding on Valentines Day appeasing investors and helping the Rand hold well above 15.0000 in contrast to the Turkish Lira that is still unloved despite more favourable macro news via a narrower than anticipated current account deficit, as the Try treads water close to worst levels vs the Buck circa 6.0600+.

14 Feb 2020 - 10:49- Forex- Source: newsquawk

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