Daily FX Market Commentary

Andy Harrison

Good morning,


LMAX Close

USDJPY 106.03 | EURUSD 1.28951 | EURJPY 136.725 | AUDUSD 0.9282 | NZDUSD 0.82824 | USDCAD 1.09728 | EURCHF 1.20633 | USDCHF 0.93551 | GBPUSD 1.61049 | EURGBP 0.80072 |


Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               106.34 | 105.945

EUR/USD             1.2901 | 1.2867

EUR/JPY               136.87 | 136.65

AUD/USD            0.9288 | 0.9251

NZD/USD             0.8281 | 0.825

USD/CAD             1.1003 | 1.0971

EUR/CHF              1.2069 | 1.2063

USD/CHF             0.93805 | 0.9351

GBP/USD             1.6108 | 1.6065

EUR/GBP             0.8015 | 0.80035


For today

  • EUR: Having broken down through the 1.2900 levels the market has continued to trade lower, pushing back through the level triggering light stops from bottom pickers before initially holding around the 1.2880 and again weak stops gave way after a brief struggle around the area. The market moves towards the London session holding only just above the 1.2870 levels. Question is what will turn up next, markets expectations from the Fed? Retaliatory sanctions by Russia whichever nothing has particularly changed over the past month or so. Downside sees light bids spotted around before pushing into the 1.2800-20 areas with bids continuing through those levels likely. Option barriers are likely around the sentimental areas and particularly on the 1.2700 areas. Topside has been stripped on the way down, and is likely to still be forming, 1.2900 levels holds light offers with light weak stops through there. Light offers continue through the 1.2900 levels to 1.3000, some strong impetus would find very little to halt a quick rise and 1.3100 is probably a stronger level.
  • GBP: Early trading was static with the market holding around the 1.6100 levels before following the move in the Euro, trailing along behind the Euro the market dipped through the 1.6080 level and into the low 1.6070 area before beginning to hold, EURGBP remained static. Low 1.6000’s now remain the best support area with a congestion connected to the Oct-Nov period of last month. As with the Euro the potential for a short squeeze should not be missed with the topside cleared on the way down with weak stops likely through the 1.6200 level and very little from there only patches of offers along the way.
  • JPY: USDJPY pushed ahead holding below 106.20 in early trading before again pushing above that area to above 106.30, continuing movements to yield by investors is now starting to have an effect on the BoJ and we are starting to see comments from members about sudden rises meaning they are becoming uncomfortable at current levels. The market currently holds around the 106.25 levels as we move towards the London opening and while the market has been reasonably quiet range wise the market has seen plenty of two way flow as the market moved through the levels. Light offers from here into the 106.50 levels and then stronger offers from 106.80 onwards in a similar pattern to the two previous big figures we’ve seen pushed through in as many days. Downside has light bids around the 106.00 level with likely stops below 105.80 areas, yield buyers are likely to move in on bids however, a concerted move lower will in all likelihood see them back away looking for a better price, so not as set in stone as previously.
  • AUD: The continual buying of USD’s in other pairs continues to weight on the Oz with no real dramatic moves just a general drift as the USD strengthens across the board, with the market more driven by the USDJPY buying and incidental issues as seen with the Cable yesterday. Strong offers now come in below the 94 cent level and continue through with no real stops seen until above the 0.9420-30 levels and then stronger offers obviously the closer you get to 95cent. Downside has patches of bids to the 0.9220 level before becoming thicker and stronger, a push through the 0.9200 level opens up the market with strong stops below the level and a wide open 0.9000-0.9200 range.

Overnight News


China Raises Yuan Fixing by Most Since 2010

China Should Keep Using Targeted Economic Measures: Sec. Times

CNY: China Central Govt. to Contribute More to Export Rebates: News


China Crisis Possible If Reforms Not Implemented: EU Chamber

China Reform Implementation Too Slow, Cautious: EU Chamber Head

JPY: Japan Finance Minister Aso: Sudden Changes in FX Level Not Ideal

Amari: Want FX to Settle at Level Reflecting Japan Fundamentals

Abe Needs More Stimulus to Raise Sales Tax, Adviser Itoh Says

Abe Cabinet Support Rises 3.9 Ppts to 55.7%: Sankei Poll

Some Say there’s Risk of Japan Downturn Persisting: Komeito Head

Toyota Labour Union to Ask for Over 1% Pay Rise in 2015: Asahi

BOJ Members: Price Target Set Based on CPI for All Items

Japan Aug. Consumer Confidence Falls to 41.2 from 41.5 in July


Australia Aug. Business Confidence Falls 2 Pts to 8

Australia July Home-Loan Approvals Rise 0.3% M/M; Est. 1.0% Rise

Australia ANZ Weekly Consumer Sentiment Rises 0.6% to 113.3


ECB’s Constancio Says won’t rule out Further Stimulus

German Coalition Partners’ Support Declines in Poll, Bild Says


U.K. LFL Aug. Retail Sales Up 1.3 Y/y, BRC Says


Fonterra Says New Zealand Milk Collection Rises 5.4% Y/Y

N.Z. Aug. Retail Card Spending Rises 0.5% M/M vs Est. 0.6% Gain


Today’s data

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

GBP       BRC Sales Monitor Y/Y Aug A 1.30% | C 0.30% | P -0.30%

JPY         Tertiary Industry Index M/M Jul A 0.00% | C 0.30% | P -0.10%

JPY         Japan Money Stock M2+CD Y/Y Aug A 3.00% | C 2.90% | P 3.00%

AUD       NAB Business Confidence Aug A 8 | P 11  | R 10

AUD       Home Loans Jul A 0.30% | C 1.00% | P 0.20%

JPY         Consumer Confidence Aug A 41.2 | C 42 | P 41.5

06:00     JPY         Machine Tool Orders Y/Y Aug (P) P 37.70%

08:30     GBP       Visible Trade Balance (GBP) Jul C -9.1B | P -9.4B

08:30     GBP       Industrial Production M/M Jul C 0.20% | P 0.30%

08:30     GBP       Industrial Production Y/Y Jul C 1.30% | P 1.20%

08:30     GBP       Manufacturing Production M/M Jul C 0.30% | P 0.30%

08:30     GBP       Manufacturing Production Y/Y Jul C 2.20% | P 1.90%

12:15     CAD       Housing Starts Aug C 195.0K | P 200.1K

14:00     GBP       NIESR GDP Estimate Aug P 0.60%


Harry Hindsight

  • EUR: While Cable opened lower the Euro was only slightly higher from Friday’s close, opening around the 1.2958 areas and holding the 1.2950 level for much of the Asian session, only starting to lose ground late in the session as EURGBP started to come under pressure in the run in to the grey hours and London. Euro’s pushed lower to test into the 1.2930 supportive areas  but never quiet forcing its way through as the market moved into the official London opening. With the release of another good Trade balance number from Germany (which is likely to be moaned about) the market started to edge its way higher and back to the opening levels. The movement came late in the session just before the London close and with some of the option barriers removed by the NYK cut the market moved swiftly to test the 1.2900 levels, breaking through with ease and triggering stops along the way as the suspected volume on the bid disappeared. The market pushed into the mid 1.2880’s and although the market did bounce it was less protracted and remained around the 1.2900 levels into the close.
  • GBP: A poll reported during the weekend set the market ablaze in Cable however, off all the polls taken this is the second Yes winner and to be honest the first one was run by the SNP, so is there a difference probably not and one suspects some mischief afoot somewhere. The market went with the poll and Cable opened some 150 pips lower and with equities specifically any company connected with Scotland taking a hit the day started. The market saw a small bounce from the pre-market lows moving steadily back above the 1.6220 areas into the Tokyo session, later into the session early Europeans and Middle Eastern accounts started to sell steadily into the market and the move lower started. The grey hours saw fresh selling and the market drifted back to the 1.6200 and onwards. With no real data to support the market and levels broken the downside was vulnerable to further downside moves and the market didn’t disappoint pushing down to just above the 1.6100 levels into early London. The market found limited support and there was a little bit of a reversal as profit taking moved in from medium term sellers and the market moved steadily into the NYK session rising to above 1.6180, option expiries and limited interest from the market to buy left the market open to the downside and the market drifted to the close pushing back to the 1.6100 level and limited support from sentimentalists. USD seemed particularly strong with ever increasing talk of rate rises in the future doing the rounds helping it to appreciate on a broad rally.
  • JPY: With the moment in GBP and a weakening Euro the USDJPY was left a little out in the shade during Asia, holding around the 105.00-20 areas through into the London session before starting a steady rise. As the market moved into the NYK session the market took a more determined move higher cutting through the light offers around the 105.30-40 and again through 105.80 levels triggering light stops and a quick move through the 106.00 levels. The market never really moved to far away from that level holding 105.80-106.00 into the close.
  • AUD: The market opened slightly short of the close on Friday, opening around the 0.9365 area, holding for much of the session in Asia around that level. As the market approached the London session the USD started to take on a mind of its own with the Oz slowly dipping, the move continued steadily throughout the day moving through the 93 cent level and slowed and held on the 0.9280 levels.

Yesterday’s premiership results

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

NZD       Manufacturing Activity Q2 A -1.90% | P 0.60% | R 0.00%

JPY         Current Account (JPY) Jul A 0.10T | C 0.18T | P 0.13T

JPY         GDP Q/Q Q2 (F) A -1.80% | C -1.80% | P -1.70%

JPY         GDP Deflator Y/Y Q2 (F) A 2.00% | C 2.00% | P 2.00%

CNY        Trade Balance Aug A $49.80B | C $40.00B | P $47.30B

JPY         Eco Watchers Survey: Current Aug A 47.4 | C 52.4 | P 51.3

CHF        Unemployment Rate Aug A 3.20% | C 3.20% | P 3.20%

EUR        German Trade Balance (EUR) Jul               A 22.2B | C 17.3B | P 16.2B | R 16.4B

CHF        CPI M/M Aug A 0.00% | C -0.10% | P -0.40%

CHF        CPI Y/Y Aug A 0.10% | C 0.00% | P 0.00%

EUR        Eurozone Sentix Investor Confidence Sep A -9.8 | C 1.4 | P 2.7

CAD       Building Permits M/M Jul A 11.80% | C -5.00% | P 13.50% | R 16.40%


Good Luck,


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