Daily FX Market Commentary

Andy Harrison

Good morning,


LMAX Close

USDJPY 109.492 | EURUSD 1.26861 | EURJPY 138.894 | AUDUSD 0.87191 | NZDUSD 0.77698 | USDCAD 1.11643 | EURCHF 1.20682 | USDCHF 0.95127 | GBPUSD 1.62412 | EURGBP 0.78113 |


Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               109.51 | 109.185

EUR/USD             1.2703 | 1.26815

EUR/JPY               138.92 | 138.66

AUD/USD            0.8768 | 0.8694

NZD/USD             0.7827 | 0.7745

USD/CAD             1.1167 | 1.1139

EUR/CHF              1.2072 | 1.2067

USD/CHF             0.9517 | 0.95015

GBP/USD             1.6268 | 1.6225

EUR/GBP             0.7814 | 0.7805


For today

  • EUR: A fairly lacklustre day with the market initially continuing with the drift sideways from NYK close, holding around the 1.2685 levels for the most part the market made some light headway in Tokyo to push steadily through the 1.2700 levels before again drifting back below as the USD lost ground lower slightly as end of month demand for Euro’s drifted off. Topside sees offers from the 1.2720 and into the 1.2750 levels before the likelihood of stops appear, through that level the market opens up a little into the 1.2800 level with offers again congregated around the level however, this is likely to be more profit taking than fresh shorts. Downside has the 1.2660 level as respectable support and only a strong move through here will open the market up for a deeper move, with likely options coming into play around the 1.2600 levels through here the market moves into the ranges from mid-2012 with immediate downside potential of 1.2400 areas, but the 1.2600 is likely to be well supported for the moment. As is the 0.7800 areas in EURGBP.
  • GBP: Cable spent the bulk of the session moving away from the 1.6225 areas regaining ground and pushing steadily to touch above the 1.6265 level as demand for end of month GBP dominated the day. Topside sees initial offerings around the 1.6280 levels and into 1.6300 however, the market may have a mixture around the level and weak stops could be triggered with any significant demand for the GBP, 1.6330-50 is light offers but through that level there is nothing to really stop the market moving back to the 1.6450-1.6500 levels. Downside bids around the 1.6220-00 area with slightly stronger bids appearing below 1.6180. Below is not so certain but suspect the market is well bid from then on.
  • JPY: USDJPY has struggled with minor end of month movements with the market opening around the 109.45 levels and peaking just above the 109.50 area in fixing demand before drifting back to the 109.20 area before recovering slightly to trade quietly. Topside offers are around the 109.80-110.00 level and unlike yesterday the market is less likely to see the break out play through the 109.55 levels seen during the previous session. With the topside for the moment solid with offers the downside would normally be the weaker side however, how deep are the yield hunter’s pockets as funds continue to pour offshore in the ever increasing hunt. Bids around the 109.20 areas give way to weak stops below 109.00 however, as with any day in the past month or so once the move lower appears the hunter’s enter the market and support the USDJPY so there is no guarantees of the market moving out of the tight range we’ve seen over the past week or so.
  • AUD: The Oz market continues to move choppily around, with early selling after a poor NZD number dragged on the Oz falling back from the 0.8720 opening areas to touch below 0.8700 before starting a steady strong rise back through continuing through the session pushing to above the 0.8760 levels before running into offers from short term profit takers. For the moment there are offers around the 0.8780 and into the 88 cent level before light stops are likely to be seen with resistance beginning to appear in the GBPAUD cross as talk of the market hitting 2.0000 the topside remains more open than it would first appear however, there are likely to be patches of resistance through each sentimental levels. Downside light bids into the 0.8750 area gives way to better bids appearing as you push through the 0.8700 level, with key support now at the 0.8660 level dating back to the beginning of the year, apart from the rhetoric and suspected RBNZ intervention in August in the NZD the Oz has not really altered too much economically and the key to the market still remains yield returns above most of the western economies for those hunters.

Overnight News


Aso: Fall in Demand after Sales-Tax Rise Is Within Expectations

Reforming GPIF Not Aimed at Boosting Stock Prices, Abe Says

Kaieda: Using GPIF to Raise Stock Prices Would Be Manipulation

Japan jobless rate falls to 3.5 percent in August

Japan Industrial Output Falls in August

Japan Aug retail sales rise 1.2% YoY

Japan Aug household spending falls 4.7% vs year ago


HSBC China Sept. Manufacturing PMI 50.2; Est. 50.5


H.K. Occupy Central Leader Says No Need to Stop Demonstration Now


New Zealand Business Confidence Falls to Two-Year Low, ANZ Says

New Zealand Building Approvals Boosted by Apartments

New Zealand August Household Borrowing Growth Slows to 5%


Australia ANZ Weekly Consumer Sentiment Rises 0.7% to 113.7


U.K. Sept. GfK Consumer Confidence -1 vs Est. Zero


Today’s data

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

NZD       Building Permits M/M Aug A 0.00% | C 0.00% | P 0.10% | R -1.70%

GBP       GfK Consumer Sentiment Sep A -1 | C 0 | P 1

JPY         Unemployment Rate Aug A 3.50% | C 3.80% | P 3.80%

JPY         Household Spending Y/Y Aug A -4.70% | C -3.60% | P -5.90%

JPY         Retail Trade Y/Y Aug A 1.20% | C 0.30% | P 0.50% | R 0.60%

JPY         Industrial Production M/M Aug (P) A -1.50% | C 0.20% | P 0.40%

NZD       NBNZ Business Confidence Sep A 13.4 | P 24.4

JPY         Labour Cash Earnings Y/Y Aug A 1.40% | C 1.00% | P 2.60% | R 2.40%

CNY        HSBC Manufacturing PMI Sep (F) A 50.2 | C 50.5 | P 50.5

JPY         Housing Starts Y/Y Aug A -12.50% | C -13.70% | P -14.10%

06:00     GBP       Nationwide House Prices M/M Sep C 0.50% | P 0.80%

07:00     CHF        KOF Leading Indicator Sep C 99 | P 99.5

07:55     EUR        German Unemployment Change Sep C -2K | P 2K

07:55     EUR        German Unemployment Rate Sep C 6.70% | P 6.70%

08:30     GBP       GDP Q/Q Q2 (F) C 0.80% | P 0.80%

08:30     GBP       Current Account (GBP) Q2 C -16.8B | P -18.5B

08:30     GBP       Index of Services 3M/3M Jul C 1.00% | P 1.00%

09:00     EUR        Eurozone Unemployment Rate Aug C 11.50% | P 11.50%

09:00     EUR        Eurozone CPI Estimate Y/Y Sep C 0.30% | P 0.40%

09:00     EUR        Eurozone CPI – Core Y/Y Sep (A) C 0.90% | P 0.90%

12:30     CAD       GDP M/M Jul C 0.20% | P 0.30%

12:30     CAD       Industrial Product Price M/M Aug C -0.20% | P -0.30%

12:30     CAD       Raw Materials Price Index M/M Aug C -1.40% | P -1.40%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Jul C 7.40% | P 8.10%

13:45     USD       Chicago PMI Sep C 61.5 | P 64.3

14:00     USD       Consumer Confidence Sep C 92.4 | P 92.4

Harry Hindsight              

  • EUR: After a stuttering start the market began to move higher, holding around the 1.2680 level for a good part of the session with the lows just below the 1.2670 levels the market eventually rejected the downside 1.2660 level for the moment and we started to see some short covering entering the market once London opened officially, early Europeans bought in the grey hours to set the tone pushing the pair into the 1.2690 areas before the release of data started to impact. No change in the data for the most part was deemed as good news and the slide towards deflation stopped for the month of Sep. The markets took it well and pushed through the 1.2700 levels to test the 1.2715 level, US data saw slightly better figures with a personal spending number sending the USD higher across the board and the Euro pushing back through the 1.2700 level to around 1.2680 before the pending home sales number hit, this gave a fresh impetus for the Euro and again the market pushed back above 1.2710 as people read the number in a different light than I would have. Saying that without the short covering entering the market the Euro again drifted back to the sub 1.2700 levels and once the London market closed the market remained in a tight 1.2685-95 range for the remainder of the day.
  • GBP: Cable struggled during the early part of the session slipping from the 1.6240’s back to just below the 1.6220 areas. Apart from a brief rise during the run into London where the market managed to push to above the 1.6260 levels the market came under pressure from a resurgent Euro and the EURGBP rising towards the 0.7830 levels forcing the GBP from its highs to slip back to below 1.6220 again, although the market remained around this level for a couple of hours the recovery was slow, edging up initially into the 1.6250’s before rising on the poor pending home sales numbers and extending briefly to above the 1.6270 levels. This reversed the gains in EURGBP bringing the cross back towards the 0.7800 levels again and then we ran out of time and London left for the day and Cable moved back to the 1.6245 area which is more or less where it opened for the day.
  • JPY: The drop off in the AUD helped the USDJPY in a push towards the 110.00 barrier deep into the Tokyo session however, the barriers soon put paid to the rise and the market moved back to the 109.50 levels where stop entries were triggered on the way up, the move down from that level started off gently but eventually tipped into weak stops from the break up play and the market was quickly forced to the 109.15 level into the NYK session and US numbers. The rest of the session saw reasonable yield buying moving into the market pushing the levels back to the opening ranges and a quiet close.
  • AUD: Talk by the RBNZ of a 0.6500 NZD level and intervention if necessary set the tone for both the NZD and the AUD, so if it was that easy why didn’t they do it before, of course this was with the back drop of the RBA being hauled before a government committee over a possible change in direction as the RBA worries about the property bubble building. So having opened around the 0.8740 areas the market pushed lower quickly moving to 0.8720 before a steady decline to the 87 cent level and a brief pause. The move into London saw the macro sellers over and done with and the AUDJPY carry still holding its own with the higher USDJPY. London came in as buyers with leveraged short term players buying quickly to take the market to just below the opening levels, The market again dipped before a more sustained move to the opening levels and into the NYK session where the market managed to push to just below 0.8750 on the US numbers. As with the rest of  the market once the London market disappeared so too did the buyers and the market slowly drifted into negative territory and close around the 0.8720 levels.

Yesterday’s premiership results

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

GBP       Mortgage Approvals Aug A 64.2K | C 65.0K | P 66.6K | R 66.1K

GBP       M4 Money Supply M/M Aug A 0.30% | C 0.40% | P 0.30% | R 0.20%

EUR        Eurozone Economic Confidence Sep A 99.9 | C 99.9 | P 100.6

EUR        Eurozone Industrial Confidence Sep A -5.5 | C -5.8 | P -5.3

EUR        Eurozone Consumer Confidence Sep (F) A -11.4 | C -11.4 | P -11.4

EUR        Eurozone Services Confidence Sep A 3.2 | C 2.5 | P 3.1

EUR        Eurozone Business Climate Indicator Sep A 0.07 | C 0.1 | P 0.16

EUR        German CPI M/M Sep (P) A 0.00% | C -0.10% | P 0.00%

EUR        German CPI Y/Y Sep (P) A 0.80% | C 0.80% | P 0.80%

USD       Personal Income Aug A 0.30% | C 0.30% | P 0.20%

USD       Personal Spending Aug A 0.50% | C 0.40% | P -0.10%

USD       PCE Deflator M/M Aug A 0.00% | C -0.10% | P 0.10%

USD       PCE Deflator Y/Y Aug A 1.50% | C 1.40% | P 1.60%

USD       PCE Core M/M Aug A 0.10% | C 0.00% | P 0.10%

USD       PCE Core Y/Y Aug A 1.50% | C 1.40% | P 1.50%

USD       Pending Home Sales M/M Aug A -1.00% | C -0.50% | P 3.30%


Good Luck,


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