Since the weekend, it has been one-way traffic in GBP, and Tuesday was no different with fresh post Brexit lows now achieved in the spot rate. Early Europe saw London traders setting about the sizeable buy order sitting in front of 1.2800, but took out this level in a swift move, which was later extended down to a low of 1.2733.
A mixture of tech based support and fresh long term demand arrested the move, along with EUR/GBP sell orders from .8750, though the cross rate extended its own levels through to .8765 before consolidating. Since then cable has attempted a revisit of the lows, but we may be starting to see some moderation setting in, with Wednesday morning seeing the release of the key services PMI number for Sep. Construction PMIs were also move better than expected – as was the manufacturing component on Monday – but data consideration limited as currency weakness has played its part.
Tomorrow’s number should have more of an impact either way. Elsewhere, EU PPI was softer than expected, but EUR/USD flow was largely based on US yields, which saw a fresh push through 1.1150 just as USD/JPY extended gains into the upper 102.00’s. Wall Street moved into the red after a steady start, but despite weighing on the AUD and CAD, the JPY rate followed the broader USD theme.
NZD/USD dipped under the .7250 mark with the Fonterra auction producing another disappointing result, with the index down 3% and WMP down 3.8%. AUD/NZD was pressed into 1.0550, but failed to make a sustained break. AUD/USD is now back under .7650, with stocks directing trade late on, while USD/CAD also took the risk/USD lead as oil prices pushed up just above $49.0.