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  • Writer's pictureMike Paterson

US Dollar in retreat after soft data shakeout

Monday 6 November 2023

Friday's eagerly awaited US NFP jobs/wages and ISM services data both missed expectations albeit not by much but combined with an indifferent US Fed earlier in the week markets had a re-appraisal moment with the Greenback tumbling and equities rallying strongly as bond yields fell again providing a better risk sentiment despite the tragic Middle East back-story sadly continuing. JPY and CHF supply notable again amid the firmer risk and helping to underpin core pairs as well.

Some soggy data out of Germny again this morning. The RBA announce their latest decision tonight/tomorrow at 03.30 GMT with markets pricing in a 25bps rate hike given recent rhetoric. US and Canadian clocks went back 1 hour over the weekend.

Equities rallied strongly in NY post-data and remain underpinned as European trading gets underway adding to the better risk tones. Saudi Arabia and Russia have announced they will continue their 1mln bpd cuts into December as most expected and oil has found some support into $84.50 after Friday's continued WTI rally capped at $87.50 then $86.50 with the jury still out. Gold capped at $2005 this time as risk firmed with natural sellers ever poised still but has found support around the $1980 area again as we we continue to range tightly. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension and now with the Middle East sadly to the fore.

GBPUSD: Support at 1.2200-30 on Friday and a strong rally post-US data amid the USD supply triggering stops through 1.2300 and now finding support at 1.2365 as we climb further this morning to 1.2412. Support also coming from the better risk-led GBPJPY and GBPCHF demand. I remain poised for rally sells when momentum fades but caution required for the moment. EURGBP: Breaking back down through 0.8700 on Friday as the GBPUSD rally outstripped EURUSD and now testing 0.8650 amid the GBP support on other crosses too.

GBPJPY: Holding 183.50 then 184.50 on Friday amid the better risk tones again and now posting 185.65 as I type but with rally sellers ever poised still amid the fragile risk.

EURUSD: Support at 1.0650 on Friday then a sharp rally to 1.0730 amid the USD supply but capping into 1.0760 as some general EUR supply prevails overll. remain a rally seller overall and poised for re-sells up here. USDJPY: A sharp retreat from 150.20 post-US data and test of 149,20 and being supported by some better risk JPY supply but capping into the previous 149.80 support area. Some jobbing pips banked again and I remain a rally seller as preferred side overall at these elevated levels but with patience a virtue as ever.

For more detailed analysis across a variety of pairs email

Interbank rates: 08.43 GMT

GBPUSD 1.2404

EURUSD 1.0746

EURGBP 0.8662

GBPEUR 1.1543

USDJPY 149.44

GBPJPY 185.40

GBPCAD 1.7174

GBPCHF 1.1121

GBPZAR 22.5784

GBPHKD 9.6596

USDCHF 0.8957

EURCHF 0.9628

EURHKD 8.3705

AUDUSD 0.6516

NZDUSD 0.5993

USDCAD 1.3639

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