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  • Writer's pictureMike Paterson

New month, same US Dollar demand

Tuesday 3 October 2023

Still seeing USD demand prevailing helped once again by rising US bond yields, better data and US government avoiding a shutdown as a new month gets underway. USDJPY up testing the key 150.00 area but tempered not only by fear of MOF/BOJ intervention but also softer risk JPY demand notable through the crosses and therefore also capping core pairs. Gold notably lower too on the high bond yield alternative and with natural sellers still in charge.

Reserve Bank of Australia left rates on hold this morning as expected and with little change in the rhetoric. Main markets focus this week will be the key US Non Farm Payrolls data on Friday.

Equities fell once again in NY trading adding to the softer risk tones but off their lows in Asia and staying firmer early European trading while WTI has retreated further after capping at $90.50 this time but holding $87.00 for the moment with the jury still out after the the recent rally ran out of momentum with the global economic picture still uncertain. Gold finding support around $1815 this time in the extended retreat with natural sellers ever poised, now between $1830-40. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension but also the Middle East among other areas of conflict.

GBPUSD: 1.2130-50 now providing the cap amid the USD demand and GBPJPY supply double whammy but support coming in at 1.2060 but with sellers poised around 1.2100. I remain poised for further rally re-sells.

EURGBP: Holding between 0.8655-65 but capping at 0.8680 as I type as core pairs rally off their lows at differing pace.. More two-way business expected. GBPJPY: Capped at 182.00 this time in the softer risk/USDJPY intevention risk double whammy but holding 180.50-60 in the extended retreat albeit with sellers ever poised still.

EURUSD: The decent 1.0530-50 support now broken amid the USD demand and a further fall to test 1.0460. I remain a rally seller overall. Options at 1.0455 in play. USDJPY: Capping at 149.950 amid the fears of MOF/BOJ intervention into 150.00 still and with JPY demand notable on the crosses due to the softer risk tones. Now a hold of 149.65. I remain a rally seller as preferred side overall at these elevated levels but with patience a virtue as ever.

More detailed analysis across a variety of pairs and 1-2-1 mentoring sessions for traders from

Interbank rates: 08.33 BST

GBPUSD 1.2072

EURUSD 1.0475

EURGBP 0.8676

GBPEUR 1.1524

USDJPY 149.75

GBPJPY 180.78

GBPCAD 1.6560

GBPCHF 1.1123

GBPZAR 23.2580

GBPHKD 9.4025

USDCHF 0.9206

EURCHF 0.9645

EURHKD 8.1591

AUDUSD 0.6320

NZDUSD 0.5910

USDCAD 1.3702

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