Daily FX Market Commentary

Andy Harrison

Good morning,


LMAX Close

USDJPY 102.122 | EURUSD 1.37575 | EURJPY 140.495 | AUDUSD 0.9362 | NZDUSD 0.86208 | USDCAD 1.08952 | EURCHF 1.22145 | USDCHF 0.88781 | GBPUSD 1.68679 | EURGBP 0.81561 |


Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.33 | 102.13

EUR/USD             1.3766 | 1.3753

EUR/JPY               140.79 | 140.52

AUD/USD            0.9363 | 0.9351

NZD/USD             0.8634 | 0.8619

USD/CAD             1.0903 | 1.0894

EUR/CHF              1.2215 | 1.22105

USD/CHF             0.8878 | 0.8871

GBP/USD             1.6883 | 1.6865

EUR/GBP             0.8158 | 0.8150


For today

  • EUR: Another very quiet day with the market opening around the 1.3755 level and unable to move beyond the 1.3765 level but holding the 1.3755 levels. For the moment the topside has light offers from the 1.3775 levels into 1.3800 and then weak stops behind there, more offers start above that level however, the market is nervous about being caught with positions in an uncertain period. Downside sees similar in makeup with light bids holding the market for the moment and moving down to the 1.3700 levels movement through that level sees light stops. Light mix from that point onwards and very little clear direction.
  • GBP: Cable saw a better bid over the session moving from below the 1.6870 and moving to just below the 1.6885 level in early trading and continuing to push against the level decent retail sales number helped to keep the market buoyant if not exactly flying along. Topside offers above the 1.6900 levels are not particularly strong however, without a strong push it’s difficult to see the levels giving way, weak stops along the way as the market heads to 1.6950 and then all offers from then on into the 1.7000. Downside sees bids and although the market moved to the 1.6835 areas yesterday the market is focused on an area just above that level as different chartist point out the potential of a head shoulder pattern, a break through the 1.6820 area will see a likely tipping point of stops into the figure and then a light mix as the Pharma backs off a little while the squabbles in political circles continue.
  • JPY: The market rose steadily through the session moving from the 102.15 levels quietly to above the 102.30 in a limited movement. The market holds close to the levels as we move into the grey hours however; the action has been very slow and not particularly exciting. Offers to the topside remain running from above the highs and thickening the close you get to 103.00 however, the USD is slowly pushing higher across the board. Downside has light bids through 102.00 but better bids are likely below the 101.50 levels.
  • AUD: If Euro’s and Cable were quiet the AUD was mute in the extreme, the market opened around the 0.9363 areas and dipped slowly to the lower 0.9350’s in reaction to the rise in USDJPY one suspects. Light bids below 0.9350 level and moving into the 0.9300 levels and with the market seemingly capped by offers into the 94 cent levels one wonders whether a rocket strategically placed my not be in order.

Overnight News


Weak Yen Effect Limited on Korea Exports, Says BOK Economist


China Should Move To More Market-Determined Exchange Rate: Lew


China April Industrial Output Rises 8.7%; Est. 8.9%

PBOC May Take Measures to Control Interest Rates: Sec. Journal

PBOC Adviser Says No Need for Big Monetary Policy Change Now

China Should ‘Proactively’ Increase Macro-Control: Sec. News

China CB tells banks to quicken mortgage lending-sources

JPY: Suga Says Abe to Give Press Conference on Defence Policy May 15

Japan to Sell Inflation-Linked Bonds to Individuals Amid Rising Inflation


Australian Housing Finance Falls in March


New Zealand food prices rise in April


U.K. LFL April Retail Sales Up 4.2 Y/y, BRC Says


Today’s data

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

GBP       BRC Retail Sales Monitor Y/Y Apr A 4.20% | C 1.60% | P -1.70%

JPY         Japan Money Stock M2+CD Y/Y Apr A 3.40% | C 3.40% | P 3.50% | R 3.60%

AUD       Home Loans Mar A -0.90% | C 1.00% | P 2.30%

AUD       House Price Index Q/Q Q1 A -1.20% | C 3.00% | P 3.40% | R 3.50%

CNY        Industrial Production YTD Y/Y Apr A 8.7% | C 8.70% | O 8.70%

CNY        Retail Sales Y/Y Apr A 11.9% | C 12.10% | P 12.20%

CNY        Industrial Production Y/Y Apr A 8.7% | C 8.90% | P 8.80%

09:00     EUR        German ZEW (Economic Sentiment) May C 40 | P 43.2

09:00     EUR        German ZEW (Current Situation) May C 60.5 | P 59.5

09:00     EUR        Eurozone ZEW (Economic Sentiment) May C 63.5 | P 61.2

12:30     USD       Advance Retail Sales Apr C 0.40% | P 1.10%

12:30     USD       Retail Sales Less Autos Apr C 0.60% | P 0.70%

12:30     USD       Import Price Index M/M Apr C 0.30% | P 0.60%

14:00     USD       Business Inventories Mar C 0.40% | P 0.40%


Harry Hindsight

  • EUR: Another quiet day as the market hangs back waiting for some signal from the ECB and plans to introduce liquidity in some form to try and break the cycle of deflation Europe is approaching. Opening around the 1.3760 level the market initially dipped to the 1.3750 level where the market met some bidding, from there it moved steadily higher continuing through the grey hours and into early London to touch the 1.3775 levels the market held the levels for a couple of hours before giving up on any further push. The market then ranged for the rest of the day but once the London market closed the will to live disappeared and the market traded quietly around the 1.3755 level into the close. With several ECB member chattering on the wires the market was totally nonplussed by the chatter and some concrete evidence is probably needed for the market to actually believe what they are saying.
  • GBP: Cable had a more eventful day however; the whole market was extremely muted with a lack of data generally. Opening around the 1.6850 the market managed to touch above the 1.6860 level in Asia continuing to trade in a tight range until the market moved into the pre London stage jumping quickly to the 1.6880 as real money stepped into a light market. It paused for a couple of hours before a second trench of buying appeared taking it to a second high above the 1.6900 levels, with the market beginning to believe that there may be an increase in rates far earlier than expected however, you do have to measure the likelihood of this with the back drop of what is occurring in Europe however, only time will tell on this and the market will probably be paying more attention to the inflationary numbers as we move along. Once the buying disappeared from the market the dip back was always likely with speculators having been dragged into a long position in the hope of some volatility not available elsewhere, as the market moved through the 1.6880 level some weak stops were triggered and the market moved to the 1.6865 levels and the London market closed. The end of the day was pretty much contained in the 1.6865/75 levels and ended the day quietly.
  • JPY: USDJPY moved higher once the Tokyo session started with the fix finding sufficient demand to move off the opening 101.85 levels and through the 102.00 levels before slowing and settling back a little into the grey hours in quiet trading. Grey hours saw sellers appear in line with several of the major banks recommendations however, although London had pushed it to the opening level the market was reluctant to move that way and the market ranged until the NYK session was in full swing, with equities rising in the US we saw fund money moving into that area and a demand for USDJPY increased lifting the pair to above the 102.15 levels and then ranging into the close.
  • AUD: Again as with the rest of the pairs the market in the AUDUSD was limited in scope, bouncing around on the NAB number in a 20 pip movement was the full scope of the range in Asia having opened around the 0.9360 area the markets low just below 0.9350 levels was not seen again during the day, rising off the lows the market struggled higher over the course of much of the London session and USD did not feature until deep into the NYK session with some light profit taking causing more damage than you’d have thought possible moving from above the 0.9385 levels to touch below the opening and holding into the close around the level.

Yesterday’s premiership results

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

JPY         Current Account (JPY) Mar A -0.78T | C -0.54T | P -0.04T

AUD       NAB Business Confidence Apr A 6 | P 4

JPY         Eco Watchers Survey: Current Apr A 41.6 | C 45.2 | P 57.9

CHF        Retail Sales Y/Y Mar A -3.00% | C 1.90% | P 1.00% | R 1.20%

USD       Monthly Budget Statement Apr A $106.9B | C $114.0B | P $112.9B


Good Luck,


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