Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.332 | EURUSD 1.38323 | EURJPY 141.548 | AUDUSD 0.90411 | NZDUSD 0.86304 | USDCAD 1.12384 | EURCHF 1.2182 | USDCHF 0.8807 | GBPUSD 1.65393 | EURGBP 0.83633 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.50 | 102.22

EUR/USD             1.3839 | 1.3814

EUR/JPY               141.73 | 141.305

AUD/USD            0.9042 | 0.9002

NZD/USD             0.8568 | 0.8522

USD/CAD             1.1260 | 1.1236

EUR/CHF              1.21915 | 1.21785

USD/CHF             0.8822 | 0.8810

GBP/USD             1.6547 | 1.6531

EUR/GBP             0.8365 | 0.83545

 

For today

  • EUR: Opening around the 1.3820 area the market held the areas with only a minor dip into the Tokyo opening to the mid-teens before starting a steady rise to the 1.3830’s where the market had bounced to after the FOMC, early trading was dominated by a push in the EURJPY however, with the yearend approaching the markets appetite on the topside seemed strong enough to keep a lid on the cross. Initially forcing the Euro lower and then the USDJPY leg later in the session allowing Euro’s to rise. As the market moved towards Tokyo lunch the market saw further attempts to move the cross higher and the Euro’s started to push again towards the 1.3840 levels. Topside offers really only start to thicken once we reach the 1.3860 levels and beyond with stops above 1.3900 areas. Better offers now lining up above the 1.3950 area. Downside sees light bids showing down to the 1.3800 level however, some half decent stops beginning to appear below the figure and a mix from there to the 1.3740 area and down.
  • GBP: Cable remained in a tight range through the session with very little movement in the pair and little volume going through, holding around the 1.6538 levels for the whole session. Technically the market looks weak with 1.6500 the next near term support with stops showing from breakout traders however, after that the market is very congested to 1.6400 with a mix of bids and stops all the way down. Topside needs to repair the failure above 1.6700. first getting through the offers to 1.6650 with stops behind and stronger offers closer to 1.6700, its wide open to some extent and given the impact of the FOMC its likely to draw more from USD moves than Euro.
  • JPY: USDJPY made early efforts higher mostly through EURJPY buying however, the offers for the moment have it and once Tokyo opened the market moved off its highs around 102.50 and dipped to the mid 102.20’s. As the EURUSD and USDJPY did balancing acts with the cross holding for the most part around the 141.50 levels the USDJPY moved steadily in a reasonable 25 pip range before firmly settling into the 102.30 area in the run to the grey hours. With little domestic news to help the pair along the market for the moment sees offers just above the highs and then some light stops around the 102.80 level to 103.00, while there are stops above the figure they quickly run into offers from 103.20 level and again one suspects repatriation clips. Downside is a little more open given the sudden move yesterday; with sizeable offers cleared the buyers look more vulnerable in the present market. Light bids down to the 102.00 levels with weak stops covering some of yesterday’s longs just below and then patchy until we move to ranges seen early in the week.
  • AUD: AUDJPY profit taking was all that figured for the Oz today, with the market opening around the 0.9035 level and failing to move much beyond that point and dropping slowly into the Tokyo opening, at this point AUDJPY kicked in and the Oz was forced to below the 0.9005 levels in the first couple of hours before recovering a little in a quiet market to 0.9020. Slight weakening in the USDJPY has allowed the Oz to strengthen a little as we move to the grey hours and the market moves towards London around the 0.9030 area. With no real news for the domestic market the topside is patchy with a little resistance around the 0.9050 area and little else until we attempt to move above the 0.9100 levels again where larger offers rest above. Downside seems devoid of orders however 0.8980 seems to be an old play with bids to the area and then stops below, stronger bids seem to be further down and around the 0.8920 levels but very patchy for the moment.

 

Overnight News

CNY:

China Weakens Yuan Reference Rate by 0.18%, Most Since March 10

JPY:

Aso: Corporate Tax Cuts Should Be Discussed in Govt Tax Panel

Japan’s Aso sees limited impact of Ukraine situation on Japan economy

Amari: Hope Corp. Tax Cut Details to Be Included in June Report

Foreign Investors Sell Most Japan Stocks Since 2001

AUD:

RBA Research Paper Says A$ Temporary Drop Boosts GDP 0.25%-0.5%

Australia May Have Found Objects Linked to Missing Plane

JPY/KRW:

Japan, North Korea agree to resume government talks – Jiji
Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

NZD       Gross Domestic Product Q/Q Q4 A 0.90% | C 0.90% | P 1.40% | R 1.20%

07:00     CHF        Trade Balance (CHF) Feb C 2.47B | P 2.59B

07:00     EUR        German PPI M/M Feb C 0.10% | P -0.10%

07:00     EUR        German PPI Y/Y Feb C -0.90% | P -1.10%

08:30     CHF        SNB Rate Decision C 0.00% | P 0.00%

11:00     GBP       CBI Trends Total Orders Mar C 5 | P 3

12:30     USD       Initial Jobless Claims (MAR 15) C 325K | P 315K

14:00     USD       Philly Fed Survey Mar C 4 | P -6.3

14:00     USD       Existing Home Sales Feb  C 4.62M | P 4.62M

14:00     USD       Leading Indicators Feb C 0.20% | P 0.30%

 

Harry Hindsight

  • EUR: Fairly quiet throughout most of the day with Asia trickling down from the opening 1.3930 area to just below 1.3920 and into the grey hours with very little movement but plenty changing hands, London moved the market back to the opening levels. The market then ranged from the 1.3910 area to those opening levels into the NYK session with a slight dip after the US current account numbers as some longs sold out before the FOMC. The market again rose a little higher however to this point you could really call it a 30 pip range for the day. With a slightly more hawkish commentary from the Fed and further $10B tapered, forward guidance was adjusted slightly so the USD rose quickly across the board moving the Euro from 1.3925 to 1.3850, driving then through some bids over the course of an hour before dropping again to the 1.3810 level, the bounce when it came was limp and could only move to the 1.3830 levels before drifting into a quiet close.
  • GBP: Cable was quiet during Asia as the market awaited employment numbers and later in the day the FOMC, moving from the opening 1.6590 areas and staying in that area for most of the Asian session moving to above the 1.6600 before slipping back. London opening saw light buying both against the USD and Euro pushing back above 1.6620 and then on the release moving to above 1.6650 over the course of a short period, the move into the NYK session saw light profit taking from day traders and while the market moved back to the 1.6610 area it again slowly moved towards the highs into the FOMC. As with the Euro Cable dropped quickly on the release and we moved to the 1.6550 area where fresh buying slowed the decent before dropping through the level and triggering breakout stops on the downside, the bounce was a little better than the Euro moving back to the 1.6540 areas from the 1.6510 lows. EURGBP had drifted through the day from the Asian openings just below the 0.8400 levels moving into the London session, London opening saw strong EURGBP selling as longs covered positions and the market moved quickly to the 0.8380 level and then a slower decent to 0.8370 and then a steady drift through the rest of the session finishing the day some 40pips adrift.
  • JPY: As with everything else the market struggled for direction with FOMC late in the day keeping most players side lined, moving from the opening 101.40 area the move into Tokyo held little change with a slight drift lower to the 101.30 levels. A worsening trade balance reversed the losses quickly moving the market to above the 101.50 into light offers and then a pop to above the 101.60 level. The move into London left the market slightly higher but no change in the lack of movement holding the 101.50-70 for the day into the FOMC. With the hawkish commentary the market quickly rose taking out the offers along the way and slowing into the 102.30-50 levels before peaking just below the 102.70 levels, the market then drifted after the news and moved into the 102.40 area for a quiet close.
  • AUD: An improvement on the previous months leading index did little to cheer the market managing only to move slightly higher before starting a general slip lower and USDJPY rose slowly leaving the AUDJPY static. Having touched down to the 0.9110 from above the 0.9135 levels the market held the line for most of the day with a dip as the US current account number hit however, the market still remained resilient holding this time around the 91 cent levels and pushing to the 0.9120 level as we moved towards the FOMC, as with everything else the AUD suffered losses against the USD and the fallout was very little different to the movements in the Euro and Cable dropping to 90.20 reasonably quickly before finding some support and holding into a quiet close.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

NZD       Current Account Balance Q4 A -1.43B | C -1.44B | P -4.78B | R -4.88B

AUD       Westpac Leading Index M/M Feb A -0.10% | P -0.20% | R -0.10%

JPY         Trade Balance (JPY) Feb A -1.13T | C -0.89T | P -1.82T | R -1.76T

JPY         All Industry Activity Index M/M Jan A 1.00% | C 1.20% | P -0.10%

GBP       Bank of England Minutes A 0–0—9 | C 0–0—9 | P 0–0–9

GBP       Claimant Count Change Feb A -34.6K | C -25.0K | P -27.6K | R -33.9K

GBP       Claimant Count Rate Feb A 3.50% | C 3.50% | P 3.60%

GBP       ILO Unemployment Rate 3M Jan A 7.20% | C 7.20% | P 7.20%

CHF        ZEW (Expectations) Mar  A 19 | P 28.7

CAD       Wholesale Sales M/M Jan A 0.80% | C 1.00% | P -1.40%

USD       Current Account Balance Q4 A -81B | C -$88.0B | P -$94.8B

USD       Crude Oil Inventories A 5.9M | C 2.4M | P 6.2M

USD       FOMC Rate Decision A 0.25% | C 0.25% | P 0.25%

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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