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  • Writer's pictureMike Paterson

More of the same as another week closes

Friday 3 June 2022

Underpinned US bond yields helping to keep the JPY supply on trend and putting a bid under cross and core pairs. Equities remain underpinned as does gold while oil prices soared towards the end of the European session yesterday, despite the OPEC+ decision to raise production targets by 648,000 bpd for July and August as markets are cynical they can fully deliver.

US NFPs on the radar today for those looking to second-guess the Fed. A reminder too that the UK's long week-end continues to celebrate the Queen's Platinum Jubilee so London markets will be closed again today.

GBPUSD: Some USD supply and GBPJPY demand helping to push the pair higher but trading 1.2550-00 for the moment. I remain poised to sell rallies but timing as ever is crucial.EURGBP: Pushing up to 0.8560 and helping to temper GBPUSD gains. More two-way business expected. GBPJPY: Underpinned at 163.00 now on the continued JPY supply.

EURUSD: Testing 1.0760 now amid some USD supply and EUR demand on the crosses generally. USDJPY: Capping above 130.00 still but underpinned at 129.50-70 amid the yield-led JPY supply.EURJPY: Sellers into 139.00 are now history but more waiting at 140.00. USDCHF: Capping at 0.9580-00 now but SNB shadow lurking in the dips still. I expect more of the same with rally sellers still poised. EURCHF: Now capping above 1.0300 and testing 1.0280 in the latest retreat. Expect some SNB smoothing but rally sellers continue to lurk in expectation of potential rate tightening.

AUDUSD: Now finding a base around 0.7250 amid AUDJPY and commodity ccy demand helped by a little USD supply too. GBPAUD capping at 1.7400 and testing 1.7300 again amid the AUD rally. NZDUSD underpinned too while GBPNZD finding support at 1.9130-50. USDCAD: Supported at 1.2530 for the moment in the rereat from 1.2575-80 amid softer USD/firmer oil/CADJPY demand. I still prefer rally sells for the moment. Option interest in play today.

Let's continue to be careful out there.

Interbank rates: 09.00 BST

GBPUSD 1.2575

EURUSD 1.0757

EURGBP 0.8554

GBPEUR 1.1689

GBPJPY 163.40

GBPCAD 1.5775

GBPCHF 1.2053

GBPZAR 19.3985

GBPHKD 9.7920

USDJPY 129.84

EURJPY 138.65

EURCHF 1.0231

EURHKD 8.3760

AUDUSD 0.7182

USDCAD 1.2557

USDCHF 0.9580

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