Greenback in retreat still

Mike Paterson
Nov 21, 2023
2 min read

Tuesday 21 November 2023

US bond yields and interest rates are drifting lower still and with markets still banking on the US Fed having finished their rate hikes we've seen a further slide in the Greenback. As I said yesteray it seems they've forgotten that it's probably the same with other key CBs too but for the moment that detail is pushed to one side.

The ongoing Middle East back-story sadly continues meanwhile and casts its own shadow over markets but still not driving them atm. Ignore at your peril though. Another reminder that it's US Thanksgiving week culminating in a long week-end so liquidity may be variable. Little on the data slate apart from Canadian CPI but a couple of CB speakers including BOE's Bailey and others from the MPC testifying to UK lawmakers from 10.15 GMT. FOMC Minutes at 19.00 GMT will be expected to be less hawkish.

Equities rallied again amid the USD supply/softer bond yields but off their highs in Asia and early European trading. Similar story for WTI which tested $78.50 this morning but falling back to $77.00 with global demand concerns continuing despite some recent OPEC+ supply cut comments. Gold also been higher $1995 after a dip to $1965 but still tightly bound as the jury remains out.

GBPUSD: Holding 1.2450-60 and finally up through 1.2500-10 helped by the USD supply but tempered by GBPJPY supply. I remain poised for further rally sells when momentum fades but caution required for the moment. EURGBP: Support at 0.8730 now but capping into 0.8755 this time. More two-way expected amid the core pair fluctuation. GBPJPY: Capping at 185.60 this time with core pairs both finding rally supply despite firmer risk tones again. JPY demand prevailing again overall which suits my core pair strategy.

EURUSD: Support around 1.0920 yesterday and posting 1.0965 amid the USD supply. I remain a rally seller overall still as we continue to range tightly but seems underpinned for the moment. USDJPY: Now capping at 148.50 amid USD supply/JPY demand but holding 147.20 so far. I remain a rally seller as preferred side overall at these still elevated levels.

For more detailed analysis across a variety of pairs email mike@mspfx.co.uk

Interbank rates: 08.46 GMT

GBPUSD 1.2530

EURUSD 1.0945

EURGBP 0.873548

GBPEUR 1.1446

USDJPY 147.48

GBPJPY 184.80

GBPCAD 1.7178

GBPCHF 1.1079

GBPZAR 23.0422

GBPHKD 9.7608