An extremely mixed session in FX, with month end flow prompting swings in the USD rates with the exception of the JPY. Early talk in the market was of a LHS fix in GBP/JPY as the portfolio hedging requirements reflected the requirement of gains on the month in UK stocks against losses in the Japanese markets. USD/JPY has been propped up in the meantime, but strong resistance seen through 103.00, while early gains in GBP/JPY were also contained ahead of Wednesday’s better levels just above 139.00. Reports that the PBoC were willing to allow a gradual weakening of CNY vs the USD saw AUD and CAD hit early on, but this was quickly tempered before more 2 way action developed. Stocks not so buoyant as they have been in previous sessions, which perhaps explained some of the later softness in AUD, NZD and CAD, but as alluded to above, month end real money flow has clouded sentiment overall. EUR/CHF is back in the low 1.0800s to suggest FX players are not wholly convinced of the recent risk on theme – USD/CHF holding off .9800 as a result. EUR/USD offers in the mid 1.1100s were tested amid USD selling, tipping 1.1150 before coming off hard, but into the London close has held up well. 2 way action in GBP until BoE Carney revealed material weakening in the economy was their central forecast, looking to probable easing in the summer. The 1.3400 pivot in cable soon turned into 1.3300, while EUR/GBP was pushed back up through .8300 and now eyeing fresh post Brexit highs. EU inflation a touch above expectations, while Canadian April GDP in line – both prompting limited response from the market, as did the much better than expected Chicago PMI.
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Mixed FX Session Prompts USD Rate Swings
Published 06/30/2016, 11:32 AM
Updated 07/09/2023, 06:31 AM
Mixed FX Session Prompts USD Rate Swings
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