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  • Mike Paterson

All aboard another rollercoaster ride!

Thursday 1 December 2022

Yesterday I signed off my summary by wondering if any patterns would be seen on the final day of the month and the answer quite simply was no but, wow, we did get some more two-way business, and some.

As the US markets got underway we saw substantial USD demand which according to one large German bank was month-end related (I have been warning the signals were mixed!) and we saw USDJPY challenge 140.00 and GBPUSD play catch up to test 1.1900 amongst many decent moves.Yesterday was supposed to be all about US Federal Reserve Chair Powell though and he duly stepped up to disappoint the rate hawks. Was it pivot talk? It didn't matter. The mere hint of more dovish tones was enough for equities to rally and the USD to give up all its gains prior and extend losses in Asia to break out of recent ranges before pausing.

Some USD supply still prevailing this morning with equities and oil both looking firmer again with gold also underpinned. Geopolitical risk in Ukraine still lurking too, quite apart from all the CB second-guessing.

GBPUSD: A good hold of 1.1900 then back up through the key 1.2050 area in the Powell aftermath and now testing 1.2130. EURGBP: Finding good support at 0.8600 again now after capping at 0.8660. I expect the two-way business to continue as jury remains out on both currencies and outlook. GBPJPY: A good cap at 167.50 after the month-end USDJPY rapid rally but holding 164.50 in the extended retreat. I would still expect two-way business as markets remain ever-fickle but with sellers to prevail overall again as I've been warning in recent times so I hope the steer has helped.

EURUSD: A decent hold at 1.0300 this time after the month-end-USD demand retreat but with EUR dip demand still evident. Not so today though but underpinned still on the USD supply.Should still see some mixed business and I remain a rally seller overall as my preferred side. USDJPY: That extended month-end flow rally into 140.00 was too good a re-sell opportunity to miss .EURJPY: Capping at 144.50 this time but holding 142.00 on the extended retreat as USDJPY pauses for breath. Expect more two-way business.USDCHF: 0.9550-60 resistance capping yet again amid all the rollercoaster USD ride but 0.9400-20 still holding with EURCHF dip demand again overall. SNB ever-vigilant.EURCHF: A hold around 0.9820 this time after finding 0.9880 a step too far yet again and we continue to range.

AUDUSD: Holding 0.6680 yet again in the retreat from 0.6740, again, and now posting 0.6830 amid the USD supply post=Powell.NZDUSD supported at 0.6200 yet again and now looking at 0.6350 in the extended rally. USDCAD: Capping at 1.3560 this time and plummeting to 1.3400 amid the oil price rally and USD supply but holding for the moment as we pause for breath.

Let's continue to be careful out there.

Interbank rates: 08.55 GMT

GBPUSD 1.2109

EURUSD 1.0430

EURGBP 0.8610

GBPEUR 1.1611

GBPJPY 165.28

GBPCAD 1.6284

GBPCHF 1.1470

GBPZAR 21.0560

GBPHKD 9.4493

USDJPY 136.50

EURJPY 142.25

EURCHF 0.9840

EURHKD 8.1382

AUDUSD 0.6800

NZDUSD 0.6326

USDCAD 1.3425

USDCHF 0.9440

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