Friday 7 October 2022
More two-way business in the past 24 hours but with a US Dollar buying bias as traders position for today's latest US NFP data with most guesses ranging from 220k to 300k. How much a decent set of numbers has been factored in already remains to be seen but, in any case, the second guessing will continue ahead of next week's CPI data. speculation will continue on whether inflation has peaked and therefore encourage softer monetary policy from the US despite yesterday's apparent lack of that intention from Fed speakers.
Equities ranging tightly but near their recent lows still as is Gold at $1711. Oil remains underpinned albeit off its highs as risk appetite remains fragile and global recession fears still cast a shadow. Meanwhile the fragile geopolitical backstory with Ukraine remaining the main elephant in the room still along with the Korean-led missile activity.
GBPUSD: A drop this time to test 1.1100-10 after capping around 1.1350 as concerns grow about the UK government's ability to deliver and the BOE running out of options to help prop up govt policy. Further reports of UK pension funds selling assets ahead of next week's BOE gilt intervention expiration only adding to the gloomy picture. Cross flows still having a big impact too. EURGBP: Held 0.8750 this time and a strong rally amid the general GBP retreat but equally capping at 0.8820. GBPJPY: A steady drop to test 161.00 amid the fragile GBP and risk double whammy but some two-way since albeit failing above 162.00 again as I type. USDJPY still vulnerable to BOJ intervention/USD sentiment turnaround but underpinned into 144.50-80 atm.
EURUSD: Capped at 0.9900 and a solid retreat to test the 0.9765 support area.Cross flows, risk, Ukraine and ECB conjecture all in the frame still as well as USD flows. Large options in play too. USDJPY: Failure above 145.00 again after a decent rally from 144.50 yesterday amid the general USD demand but still vulnerable to BOJ intervention/soggy-risk JPY demand. EURJPY: Capped now at the previous support line at 142.50 amid softer risk tones and core pair rally sellers. USDCHF: Capping at 0.9890 helped by EURCHF retreat but now support at 0.9840-50 with SNB keeping an eye on matters still. EURCHF: A good cap at the old base of 0.9730 again but holding 0.9680 now with SNB still casting its shadow.
AUDUSD: Capping into 0.6480 then 0.6440 in latest rallies amid the general USD demand and softer risk tones but holding 0.6380 so far.NZDUSD also had a soggy day falling from 0.5730 to 0.5625 but finding a little demand as I type as the two-way business continues. USDCAD: A good rally on the general USD demand but capping around 1.3750 helped by underpinned oil and some CADJPY demand along with some USD supply in last hour.
Let's continue to be careful out there and have an enjoyable weekend. Hopefully another decent result for the mighty Shrimpers' BT-televised game at 12.30.
Interbank rates: 08.12 BST