Wednesday 4 October 2023
USD demand still prevailing helped once again by rising US bond yields with the key 10-year posting 4.86%, with the trend spreading globally but it's the Greenback that's finding most favour among investors still. US domestic issues continue to lurk but markets have their tunnel vision glasses on again.
Big move yesterday was the MOF/BOJ intervention when USDJPY broke the key 150.00 area after positive US Jolts data which saw the pair drop to 147.28 in minutes only to run into dip demand and bounce back above 149.00 almost as quickly. No official denial or confirmation from the Japanese authorities but they've left their calling card for sure as I've been warning for some time now. The RBNZ left rates on hold this morning as expected but with a more dovish tone in the rhetoric and we saw some NZD supply. Main markets focus this week remains the key US NFPs on Friday.
Equities fell once again in NY trading as bond yields rose but off their lows in Asia and staying firmer again in early European trading per rceent pattern. WTI has had an upn down 24 hours and after capping at $89.50 this time has held $87.30-50 for the moment with the jury still amid the global economic picture still uncertain. Gold finding support around $1815 again with natural sellers ever poised, now between $1825-30. 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: 1.210-20 now providing the cap amid the USD demand and GBPJPY supply double whammy again but support coming in at 1.2035-40 this time. I remain poised for further rally re-sells. EURGBP: Holding between 0.8655-65 still but capping at 0.8685 as I type as core pairs rally off their lows at differing pace again. More two-way business expected. GBPJPY: Capped at 181.30 yesterday then sharp fall to 178.00 on the MOF intervention this with softer risk tones. Now trading 179.50-180.50 amid the USDJPY uncertainty with sellers ever poised still.
EURUSD: 1.0450 holding the latest retreat-and nudging back up through 1.0475-85 as I type where we also have option interest today. I remain a rally seller overall. USDJPY: Posting 150.15 after the US Jolts data and that was the signal for MOF/BOJ intervention as I've been warning for a while with JPY demand notable on the crosses due to the softer risk tones. Cue rapid fall to 147.28 andf some pips gratefully banked along the way with resells placed above 149.00. I remain a rally seller as preferred side overall at these elevated levels but with patience a virtue as ever. Yesterday's move proved my point but equally provided great opportunity for dip buyers too.
Interbank rates: 08.50 BST
GBPUSD 1.2088
EURUSD 1.0482
EURGBP 0.8670
GBPEUR 1.1532
USDJPY 148.91
GBPJPY 180.03
GBPCAD 1.6563
GBPCHF 1.1126
GBPZAR 23.3803
GBPHKD 9.4181
USDCHF 0.9201
EURCHF 0.9645
EURHKD 8.1684
AUDUSD 0.6322
NZDUSD 0.5900
USDCAD 1.3701
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