Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 122.835 | EURUSD 1.06361 | AUDUSD 0.71922 | NZDUSD 0.65139 | USDCAD 1.3365 | USDCHF 1.01808 | GBPUSD 1.51229 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               122.96 | 122.67

EUR/USD             1.0645 | 1.06225

EUR/JPY               130.77 | 130.435

AUD/USD            0.7207 | 0.7186

NZD/USD             0.6537 | 0.6505

USD/CAD             1.3370 | 1.3342

EUR/CHF              1.0831 | 1.08205

USD/CHF             1.0193 | 1.0170

GBP/USD             1.5140 | 1.5120

EUR/GBP             0.7036 | 0.7021

For Today

• EUR: A quiet session with the market opening around the 1.0635 levels and testing around 10 pips in each direction as the market holds steady into London towards the lows as the market waits for the final GDP reading for Germany, Topside offers light into the 1.0700 levels with possible weak stops through the levels and opening then to stronger offers on a push through to the 1.0740-60 areas and then increasing into the 1.0780 areas, a push through the 1.0830 level will open the topside for further gains, Downside bids into the 1.0600 levels and through to the 1.0580 areas before weakness appears and the possibility to a test to the 1.0530 levels and then possibly strong bids all the way to the 1.0500 areas, a push through the level will open up the downside with breakout plays driving the market lower and through the lows from March.
• GBP: Cable moved a little higher from the opening around 1.5125 with very little movement to the downside stalling at the 1.5120 level and rallying to the 1.5135 areas where the market remained for the bulk of the session, topside offers weak until the market moves to the 1.5200 areas where light offers make an appearance, the move through to the 1.5250 levels is likely to be a little slow and as the market has spent plenty of time in the area with only a couple of days through the level in the last couple of weeks a push through the area does have the potential to test the 1.5300 area however, again that is likely to be a struggle for the moment. Downside bids into the 1.5100 level for the moment dominate the market however, with important US numbers in the market later in the day the market is likely to be dull until that point and numbers beyond the consensus would help explain yesterday’s meeting as the market moves towards the Dec lift off or not, the downside is likely to open on slightly through the 1.5100 levels and 1.5050 onwards is likely to see stronger support on a dip lower.
• JPY: A quiet range for the USDJPY as with the rest of the market and the USDJPY having opened around the 122.85 levels struggled a little higher into the Tokyo session before dropping back to hold around the 122.70 levels and trading in a narrow range to the grey hours, Topside offers into the 123.20 areas a limited however, they are likely to continue lightly through to the 123.50-60 where the offers will possibly increase as the market pushes towards the 123.80 levels, downside bids light through to the 122.30 levels where they begin to increase a push through the 121.70 level will open up further tests to the downside and the move back towards the previous ranges.
• AUD: If the market was quiet in the majors the Oz was even quieter, with the market trading in a very narrow range with only the early Tokyo market able to push the market above the 72 cent level but doing very little through the 0.7205 areas, opening around the 0.7195 level you can see how quiet the market has been. Topside offers from the 0.7240 levels and continuing probably to the 0.7260 areas, light offers then move in until stronger markets appear on any attempt to the 73 cent levels. Downside bids light to the 71 cent areas before better bids start to appear in the market on dips through to the 0.7050 areas and a move lower will meet stronger bids, any move through 70 cents is likely to see even stronger bids appearing as long as everything is even with the numbers later in the day.

Overnight News

CNY:

Yuan SDR Entry Would Be Credit Positive, Support Reform: Moody’s

JPY:

Aso: Not Considering Future Tax Cuts without Replacement Revenue

Amari Says Gains in Minimum Wages Need to Match Economic Growth

Nikkei Japan Nov. Flash Manufacturing PMI 52.8 vs 52.4 in Oct.

AUD:

Australia Potential Annual GDP Growth Now 2.75%: Treasury’s Ray

Australia ANZ Weekly Consumer Sentiment Falls 1.2% to 114.5

EUR:

Hollande Approval Rating Gains After Terrorist Attack: Poll

Today’s data

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

JPY         PMI Manufacturing Nov (P) A 52.8 | C 52.1 | P 52.4

07:00     EUR        German GDP Q/Q Q3 (F) C 0.30% | P 0.30%

09:00     EUR        German IFO – Business Climate Nov C 108 | P 108.2

09:00     EUR        German IFO – Current Assessment Nov C 112.3 | P 112.6

09:00     EUR        German IFO – Expectations Nov C 103.5 | P 103.8

13:30     USD       Trade Balance Oct C -61.8B | P -58.6B

13:30     USD       GDP (Annualized) Q3 (S) C 1.90% | P 1.50%

13:30     USD       GDP Price Index Q3 (S) C 1.20% | P 1.20%

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Sep C 5.20% | P 5.09%

15:00    USD       Consumer Confidence Nov C 99.2 | P 97.6

Harry Hindsight              

• EUR: Early Asia was dominated by the news that a meeting of the Fed was to take place later in the day and the market traded lower with expectations rising for the December lift off, Euros traded steadily into the Tokyo session before dropping away to test the 1.0600 levels from the opening around the 1.0640 areas, the market held the level for awhile before starting to steadily recover through into the grey hours PMI numbers helped the market to push a little higher and into the opening areas however, until the meeting was done with the market struggled for direction and pushed only to the 1.0655 levels before testing to the downside again once the non-event of the Fed meeting was done with and the push lower resumed with the Euro testing through the 1.0600 levels this time and holding in the 1.0590’s before returning slowly to the 1.0635 and only slightly below the opening levels.
• GBP: Steady pressure lower through the session testing in early trading on the announcement of the Fed meeting to the 1.5160 levels before holding and moving steadily to the 1.5170-80 levels into London, early London saw early USD buying and the Cable quickly moved to test below the 1.5150 areas and ranged through the level into the NYK session testing to 1.5130 and above the 1.5160 levels before the meeting. NYK bought Cable and with very little from the meeting released into the market the Cable pushed through to the 1.5190 levels in steady trading before dropping back just as quickly as USD buyers rematerialized and left the market holding the 1.5120 level for a decent period of time, late selling attempted a move lower however, the downside bids into the 1.5100 areas was strong enough to hold the market and finish the day in the mid 1.5120’s.
• JPY: The USDJPY moved through the early session slowly rising from the opening around the 122.90 areas to test the 123.00 levels before the announcement that the Fed was to meet in a surprise announcement, the market quickly rallied to the 123.25 levels before trading the 123.10-123.25 levels through to the limited communique to the market and the USD dropped back through the opening levels and held the 122.80 areas before recovering only slightly and dropping back to hold around the 122.80-90 areas to the close in quiet trading.
• AUD: Very quiet for the Oz with the market dropping with the other currencies as the USD rallied across the board on the announcement of the Fed meeting for later in the day, however, having dropped from the opening 0.7230 areas the market touched 0.7160 levels and then rose to trade in a very tight 0.7170-80 levels for the move through into London and to the opening in NYK, a slight recovery to test the 72 cent level saw the market widen the range through NYK and the market for a period traded either side of 72 cents until the run to the close with the market slowly folding in on a tightening range and hold the 0.7190 levels for the close.

Yesterday’s premiership results

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

EUR        France Manufacturing PMI Nov (P) A 50.8 | C 50.7 | P 50.6

EUR        France Services PMI Nov (P) A 51.3 | C 52.1 | P 52.7

EUR        Germany Manufacturing PMI Nov (P) A 52.6 | C 52.2 | P 52.1

EUR        Germany Services PMI Nov (P) A 55.6 | C 54.3 | P 54.5

EUR        Eurozone Manufacturing PMI Nov (P) A 52.8 | C 52.3 | P 52.3

EUR        Eurozone Services PMI Nov (P) A 54.6 | C 54.2 | P 54.1

USD       Existing Home Sales Oct A 5.36M | C 5.43M | P 5.55M

 

Good Luck,

Andy

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