Daily FX Market Commentary

Andy Harrison

Good Morning,

For Today

• GBP: A quiet tight range through the session lifting through to the 1.3530 level and dipping through into the Tokyo session to test the 1.3505 level and ranging in an ever decreasing range around the 1.3520 area through to the grey hours, light topside offers into the 1.3550 area and then increasing into the 1.3600 areas with weak stops above the level however, likely to be light and stronger offers building above the 1.3650 area onwards and likely to be through the 1.3700 area. Downside bids light through the 1.3500 level through to the 1.3450 area where stronger bids start to appear
• JPY: Dropping off from the opening around the 104.25 areas testing to the 104.10 into the Tokyo opening before starting a steady rise through to the 104.30 level marginally higher for the move into the grey hours, topside congestion around the 104.40-60 area and then increasing into the 104.80 level with strong offers through the 105.00 area, Downside bids light through to the 103.00 level before stronger bids start to appear and increase through to the 102.50 area with very little in the way of stops on a dip through with likely increasing bids to the 102.00 areas and likely to see stronger bids continuing from importers.
• AUD: Rising a little from the opening through to the 0.7710 area before slipping through into the Tokyo session eventually testing to the 0.7680 area for the move into the grey hours, light bids into the 0.7660-40 area with stronger bids on a move through to the 0.7620 level with weak stops likely through into the 0.7580 area and the market then congested through sentimental levels. Topside offers into the 0.7750 area likely to slow the market but not stop it and stronger offers then appear on a push through the 0.7780 area through to the 0.7820 area before strong stops appear with option barriers appearing in the area.
• EUR: Lifting from the opening around the 1.2150 area pushing through the 1.2160 area into the Tokyo session before dropping quickly lower as the talk of a double dip recession cramping new Army uniforms appear to be on the horizon, testing quickly through to the 1.2140 and defining the early range for the day, the market headed into the grey hours holding around the lows. Topside offers light through the 1.2200 area and continuing lightly through to the 1.2250 area where the market starts to thicken a little on the offer and the closer the market moves to the 1.2280 area the stronger the offers, a push through the 1.2300 area will likely see stronger offers building with short term sellers likely joining the queue with weak stops on a strong push through the 1.2320-30 areas opening only to the 1.2350 areas. Downside bids getting stronger the closer the market gets to the 1.2120 area with likely stronger congestion through the area and strong stops on a push through the 1.2080 area with very limited bids to support the market through to the 1.20 handle.

Overnight News

GBP/CNY:
UK risks China spat with Johnson attack on demented medicine – BBG
USD:
Biden’s go big stimulus plans set up fresh fight in Senate – BBG
Richmond Fed’s Barkin: You would need to see substantial progress towards growth before discussion on QE taper gets on the table – RTRs
Kaplan hopes to begin discussion on Fed tapering later this year – BBG
AUD/CNY:
Frydenberg rejects AUD300m Chinese bid for Probuild – AFR
USD/CNY:
Trump’s final days bring new turmoil to US-China relations – BBG
JPY/GBP:
Japanese buy most UK Gilts since 2014 – MOF
GBP:
BoE’s Tenreyro says more stimulus may be needed for UK – BBG
ZAR:
In eye of storm: S. Africa closes borders amid rising Cases – PTI
EUR:
Euro area heads double dip recession as lockdowns drag on – BBG

Today’s Data
JPY Adjusted Current Account A 2.34t | P 1.98t
JPY Current Account n.s.a. (NOV) A 1.878t | C 1.551t | P 2.145t
GBP BRC Retail Sales Monitor YoY (DEC) A 4.8% | P 7.7%
1000 GBP BoE MPC Member Broadbent Speaks
1430 USD FOMC Member Bostic Speaks
1435 USD FOMC Member Brainard Speaks
1500 USD JOLTs Job Openings (NOV) A | P 6.652m
1600 USD FOMC Member Bostic Speaks
1600 USD FOMC Member Kaplan Speaks
1700 USD FOMC Member Mester Speaks
1800 USD GOMC Member George Speaks
2130 USD API Weekly Crude Oil Stock A | P -1.663m

Harry Hindsight

• GBP: Opening unchanged and holding through to the Bank Holiday Tokyo session before slipping from the 1.3580 spike to test through to the 1.3520 before slowing and taking most of the day to trade through to the lows just above the 1.3450 area, ranging around the 1.3500 level through the Tokyo session and then moving into the London session ranging a little wider but only starting to dip lower again into the NYK session, bouncing off the lows the market started a steady rise through to the London close testing back above the 1.3500 level and then topping around the 1.3535 area for a quiet run to the close.
• JPY: A little lower on the opening saw the market pushing just a little through the 103.90 area before pushing into the Bank Holiday Tokyo session pushing through to the 104.10 before stalling for a short period, another push took the market through to the 104.20 area and ranged around the area through to the grey hours, a slow drift through towards the 104.05 areas and holding in the area into the run to NYK with the USDJPY pushing through to the 104.40 before dropping back to the 104.10 level and a quiet run to the close.
• AUD: First hour saw the market filling the gap on the charts after a low start before returning to a selloff through the session pushing into the Tokyo session dipping from the opening just short of 0.7765 area and testing to the 0.7720 area before slowing but continuing, the market pushed through the 0.7700 level and based along the 07695 level through to the grey hours, light buying holding around the 0.7710 through the London session before slipping lower through the opening in NYK and testing through to the lows around the 0.7670 area before returning to the 0.7700 area for a long drawn out move to the close.
• EUR: Unchanged from Fridays close and holding quietly through the opening hour before dipping away through to the 1.2185 area before slowing and continuing the run through to the 1.2170 area to base in the area through to the grey hours, light buying in early Europe saw the market in London opening and running to the 1.2200 area before dropping off through to the 1.2155 area and a quiet run through to the NYK sessions opening, sellers through to the 1.2135 lows before recovering to the 1.2170 area but drifting for the close.

Best Regards
Andy

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