Tuesday 6 August 2024
In these ever-fickle times markets have reversed a lot of yesterday's moves with the Nikkei closing up 10% amid unscheduled talks between the MOF and BOJ aimed at sending a message of calm. Other equity markets are off their lows too and bringing with it some better risk tones with significant reversals in Yen and CHF pairs. Some USD demand notable generally after better than expected US ISM data and both the Fed's Goolsbee and Daly trying to lend a steady hand on the economic outlook/rate cut expectations with USDJPY once again leading the way and posting highs of 146.50 in Asia.
The overall mood however remains one of caution amid the worsening geopolitical outlook too and we can expect more volaltility with European trading already bringing some retreats. The RBA left interest rates on hold as widely expected amid the uncertain economic climate and with hawkish tones on Australian inflation appearing to rule out any further rate cuts for the moment. Today's slate brings little of note on either the data or CB speaker front.
Per my opening paragraphs equity markets globally have rallied after posting further fresh lows yesterday but sellers prevailing again as European trading gets underway. WTI also rallied amid the better risk tones but has also found itself in retreat this morning. Support coming in at $73.00-10 as I type after the latest retreat from $73.80-00. Gold is still making its mind up and has found some dip demand into $2395 this time with rallies capped by more profit-taking between $2410-20 now. Dip demand should remain but profit-takers/sellers still poised.
GBPUSD: Capping at 1.2800-10 after the GBPJPY-led rally from 1.2750 but now seeing a reversal back down there as USDJPY caps above 146.00 and YPY demand returns with EURGBP also still underpinned.EURGBP: Holding 0.8560 and posting fresh recent highs of 0.8585. Still underpinned overall for the moment. ECB/BOE rate cut conjecture contines but these moves are still all about risk flows. GBPJPY: Yet another rollercoaster ride unsurprisingly amid the USDJPY volatility. Capping at 187.00 in the rally from 183.50 but a retreat into 1885.50 as I type.
EURUSD: Climbing up through 1.10000 yesterday amid the initial USD supply but retreating on the firmer USD tones in NY and now rallies tempered at 1.0965 by the return of safe-haven JPY and CHF demand on the crosses too. USDJPY: Lots of two-way business and hence volatility still as the pair reversed the losses into 141.50 and found a base at 142.00, then 143.50 and 144.00 before capping at 146.50 and now sellers prevailing again with a retreat into 145.10 before bouncing.
Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
Interbank rates: 07.32 BST
GBPUSD 1.2764
EURUSD 1.0945
EURGBP 0.8573
GBPEUR 1.1663
USDJPY 145.72
GBPJPY 188.06
GBPCHF 1.0890
GBPZAR 23.6320
GBPHKD 9.9245
USDCHF 0.8554
EURCHF 0.9360
EURHKD 8.5043
AUDUSD 0.6519
NZDUSD 0.5923
USDCAD 1.3890
Comments