Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 115.099 | EURUSD 1.06976 | AUDUSD 0.75474 | NZDUSD 0.72648 | USDCAD 1.31518 | USDCHF 0.99927 | GBPUSD 1.25496 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.07403 | 1.07081

USDJPY                 114.946 | 114.261

GBPUSD               1.26006 | 1.25563

AUDUSD              0.75610 | 0.75474

USDCHF               0.99814 | 0.99611

USDCAD               1.31397 | 1.31215

NZDUSD               0.72773 | 0.72567

EURGBP               0.85342 | 0.8503

EURCHF                1.06983 | 1.0688

EURJPY                 123.099 | 122.696

 

For today

  • EUR: With pressure building in the US over Pres. Trumps outright ban immigration order and rights to travel to the US the USD opened lower across the board with the Euro opening around the 1.0720 levels drifting to through the 1.0710 in the first hour before starting a steady climb through into the Tokyo session, the market tested to the 1.0740 areas before spending the rest of the session drifting towards the 1.0730 levels and holding through to the grey hours in the area. Topside offers through the 1.0740 levels and likely to continue through to the 1.0770 areas with possibly stronger offers into the 1.0800 level, a push through the 1.0810 areas will likely see weak stops appearing and the market opening to challenge towards the 1.0860 areas with possible technical offers likely. Downside bids light through the 1.0700 areas with weak stops likely through the 1.0680 areas however, this is likely to be light with a move towards the 1.0660 areas with stronger bids appearing and congestive bids likely through to the 1.0600 areas and through.
  • GBP: Opening higher with the rest of the market against the USD around the 1.2570 areas, the market initially dipped back to fill in the gap however, once the market hit the 1.2560 levels and the early Japanese market moved in it quickly moved through to test the 1.2600 levels, with strong EURGBP selling pushing the cross from the 0.8530 areas to close to the 0.8500 level before steadily recovering, with the French election foremost in early trading, the market having failed the 1.2600 level a few times started a steady drift back towards the opening levels to hold just above the 1.2570 areas into the grey hours. Topside offers through the 1.2600 levels likely to see weak stops through the level however, these are likely to be light and lost in the mix, a push through the 1.2630 level will likely see stronger bids entering the market with limited offers through the 1.2650 areas with stronger offers likely to be building into the 1.2700 area, downside bids light around the 1.2550 areas, with better bids into the 1.2500 level, the market pushing through that level will likely see stops building through the level with congestion through to the 1.2400 areas, possibly nothing strong but continuous bids through to the stronger bids.
  • JPY: USDJPY opened lower around the 114.90 areas which remained the high with the early Japanese market selling the USDJPY through to 114.60 areas before finding some limited bidding into the levels, having moved into the Tokyo session, talk of Pres. Trump putting currency stipulations on trade deals impacted the market as well and will likely impact JPY and CNH as two of the countries who openly use intervention tools to keep their currencies stable at best, the market eventually tested to the 114.30 levels before bouncing in midsession and moving steadily back to the 114.55 areas and slowly rising into the grey hours. Topside offers likely into the 115.00 levels and continuing through the level towards the 115.50 area which is likely to be particularly strong, a test through the level will possibly see a strong test of the 116.00 areas however, congestion around the level will likely see the market struggling. Downside bids into the 114.00 areas are likely to be reasonable with a push through the 113.90 area likely to see stops appearing on a break and the market open for a test lower and those lows from earlier in the month around the 112.50 and strong bids.
  • AUD: Having opened around the 0.7560 levels the market was unable to push higher and the move into the Tokyo session saw the market pressing to fill the gap and holding around the 0.7550 areas only just above the closing, the market then ran around the 0.7555 level for the bulk of the session only slipping through to the 0.7545 areas into the grey hours. Topside offers through the 0.7570 areas light and building through to the 76 cent levels, a push through the 0.7610 areas will likely open the Topside for a test to the weaker 0.7640-60 areas with the market then opening to a larger gain. Downside bids through the 0.7520 areas and the bids increasing on a move to the 0.75 cent areas with bids thinning but likely to be present until the market breaks through 0.7480 and the market seeing only small bids into the 0.7440-60 areas.

 

Overnight News                                                                  

USD:

Trump’s travel ban stirs faint corporate outcry beyond Silicon Valley

Kelly says green card holders won’t be stopped by travel ban

World leaders criticise Trump immigration move

Thousands protest second day against Trump travel ban

GBP:

UK Business, consumer morale holds up at start of 2017: CBI, Deloitte

GBP/USD:

Britain wins exemption on Trump visa ban as PM face criticism

EUR:

Le Pen leads voting intention with 25% in 1st round: Kantar-Sofres FR. Election poll

 

 

Today’s data

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

NZD       Trade Balance (NZD) Dec A -41M | C -95M | P -705M | R -746M

JPY         Retail Trade Y/Y Dec A 0.60% | C 1.60% | P 1.70%

08:00     CHF        KOF Leading Indicator Jan C 102.9 | P 102.2

10:00     EUR        Eurozone Business Climate Indicator Jan C 0.8 | P 0.79

10:00     EUR        Eurozone Economic Confidence Jan C 107.8 | P 107.8

10:00     EUR        Eurozone Industrial Confidence Jan C 0.2 | P 0.1

10:00     EUR        Eurozone Services Confidence Jan C 12.7 | P 12.9

10:00     EUR        Eurozone Consumer Confidence Jan (F) C -4.9 | P -4.9

13:00     EUR        German CPI M/M Jan (P) C -0.50% | P 0.70%

13:00     EUR        German CPI Y/Y Jan (P) C 2.00% | P 1.70%

13:30     USD       Personal Income Dec C 0.40% | P 0.00%

13:30     USD       Personal Spending Dec C 0.50% | P 0.20%

13:30     USD       PCE Deflator M/M Dec C 0.20% | P 0.00%

13:30     USD       PCE Deflator Y/Y Dec C 1.70% | P 1.40%

13:30     USD       PCE Core M/M Dec C 0.10% | P 0.00%

13:30     USD       PCE Core Y/Y Dec C 1.70% | P 1.60%

15:00     USD       Pending Home Sales M/M Dec C 1.10% | P -2.50%

 

Weekend News

USD/JPY:

Trump, Abe Committed to Deepening Trade Ties, White House Says
JPY/USD:

Abe: Agreed With Trump to Hold Summit in Washington Feb 10
USD:

Judge Grants Nationwide Stay on Trump’s Immigration Order
EUR:

ECB Must Keep ‘Highly Accommodative’ Monetary Conditions: Visco
Eurogroup Debt Measures Not Specific Enough, IMF Draft Says
Italian Premier Says Upholding EU Values Key in Difficult Times
EUR/USD:

Hollande Warned Trump of Risks of Protectionism: Statement
Europe Wants Balanced Trade Relations with U.S., Hollande Says
USD/EUR:

White House Says Trump & Merkel Discussed NATO, Middle East
GBP/USD:

May Under Fire over Failure to Condemn Trump’s Refugee Ban
U.K. Says May Does ‘Not Agree’ With Trump’s Refugee Ban: PA
USD/GBP:

Trump Tells May He’ll Maintain Trade Terms for U.K. After Brexit
USD/RUB:

Trump, Putin Use First Formal Phone Call to Seek Better Ties
Trump, Putin Prioritize Fight Against Terrorism in First Call
MXN:

Mexico Says It’s Disappointed with Netanyahu Tweet on Trump Wall
AUD/USD:

Turnbull Confident Trump Will Honour Refugee Deal with Australia
KRW:

North Korea Restarts Yongbyon Plutonium Reactor, Institute Says
TRY:

Turkey Cut to Junk by Fitch on Political Woes; Lira Declines
TRY/GBP:

Erdogan Says He Talked about Trade, Terrorism with U.K.’s May

 

Harry Hindsight

  • EUR: Weakness through the Asian session saw the market trade initially sideways from the opening around the 1.0680 areas before slowly slipping lower into the grey hours, the move into the London session saw the market moving off the lows to test back to the opening levels on the initial move before starting a climb to the 1.0700 areas not quiet making it and ranging through into the NYK session, increasing import prices in Germany is something to bear in mind for the future as inflationary pressures build, the opening into the NYK session saw the USD slipping lower and the release of worse than expected numbers saw the Euro trade quickly through to the 1.0725 areas before drifting a little around the 1.0710 areas, Michigan confidence number saw the USD looking a little better and the Euro back to sub 1.0700 in the move into the close.
  • GBP: Cable opened around the 1.2590 areas and briefly tested to above the 1.2600 areas, as the market moved deeper into Tokyo the light USD buying translated into Cable selling with the market starting a tight channelled drive lower to test towards the 1.2530 areas and basing along that level into the London session, initial London buying saw the market move higher however, the chatter of Brexit. The move into the grey hours saw the market holding the 1.2530 levels with weakness in the Euro offsetting some of the weakness and a rise to the 1.2570 levels before collapsing back again to make the lows through the 1.2520 areas and then ranging through to the NYK session holding the 1.2540 area, USD weakness after the numbers saw the Cable back to the 1.2580 levels however, it was tenuous at best and the move back through the 1.2530 level was quick before ranging steadily higher to finish the day around the 1.2550 levels.
  • JPY: USDJPY remained reasonably strong through the day with Lunar New Year starting, the market opening around the 114.60 levels saw the lows set early in the session with the Tokyo market lifting off the 114.40 areas to push through some weak stops topping just through the 115.00 level the market remained in touch with the level through to the grey hours and the move into the London session saw the market extending the highs through 115.30 level and then ranging through the balance of the session for the most part holding the 115.00-30 levels with on brief spike towards 115.40 for the highs and running out just above the 115.00 level.
  • AUD: From the opening 0.7530 levels ranging through the early part of the session rising to the 0.7540 areas before drifting into the grey hours slipping through to test towards the 0.7510 levels and ranging through into the London session between that low and the 0.7535 area, the move rose into the NYK session and drove through to the 0.7575 areas with weak stops triggered along the way however, that was near enough the high for the day and the market drifted back to initially hold above the 0.7550 level and then dipping to a tight range around the 0.7545 level to the close.

 

Yesterday’s premiership results

JPY         National CPI Core Y/Y Dec A -0.20% | C -0.30% | P -0.40%

JPY         Tokyo CPI Core Y/Y Jan A -0.30% | C -0.40% | P -0.60%

AUD       PPI Q/Q Q4 A 0.50% | C 0.20% | P 0.30%

AUD       PPI Y/Y Q4 A 0.70% | P 0.50%

AUD       Import Price Index Q/Q Q4 A 0.20% | C 0.40% | P -1.00%

EUR        German Import Price Index M/M Dec A 1.90% | C 1.30% | P 0.70%

EUR        German Import Price Index Y/Y Dec A 3.50% | C 2.70% | P 0.30%

EUR        Eurozone M3 Y/Y Dec A 5.00% | C 4.90% | P 4.80%

USD       GDP (Annualized) Q4 (A) A 1.90% | C 2.20% | P 3.50%

USD       GDP Price Index Q4 (A) A 2.10% | C 2.10% | P 1.40%

USD       Durable Goods Orders Dec (P) A -0.40% | C 2.60% | P -4.50%

USD       Durables Ex Transportation Dec (P) A 0.50% | C 0.50% | P 0.60%

USD       U. of Michigan Confidence Jan (F) A 98.5 | C 98.1 | P 98.1

 

Stay lucky

Andy

 

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