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  • Writer's pictureMike Paterson

Greenback gets a shove lower

Wednesday 26 October 2022

A 24 hours in which we've seen a definite wobble in US Dollar sentiment as bond yields fall and again this morning with 10-year US Treasury yields down to 4.06% vs 4.34% on Friday. Falling gas prices in Europe also in focus as we wait on ECB decision tomorrow. EURUSD back up through parity but still finding sellers on cross-pair rallies as the jury remains out. GBPUSD has so far shaken off a potential delay in the much-anticipated UK fiscal statement due on 31st Oct with decent bids at 1.1430 per my tweets holding the drop and now up to 1.1560 as I type.

Oil and equity markets making their minds up still, as is gold as it continues to decide exactly what role it serves in these ever-fickle markets.

GBPUSD: A session yesterday that suddenly burst into life as the Greenback came under attack and we saw a sharp rally before capping at 1.1500. Decent support found at 1.1430 per my tweet warnings and now up through 1.1600. EURGBP: Finding support at 0.8660 yet again after capping at 0.8700 this time on some renewed GBP demand helped by GBPUSD breaking up through 1.1500. I still expect some two-way business with the Eurozone facing issues of its own and ECB tomorrow. GBPJPY: Finding decent support at 169.00 as core pairs find dip demand. USDJPY still vulnerable to sell-offs.

EURUSD: Making good use of the USD supply and reported falling gas prices ahead of the ECB's expected rate hike tomorrow and now up through 1.0000 to test 1.0035-50 resistance. Cross flows, risk, Ukraine and ECB conjecture all in the frame still as well as USD flows and ECB. Decent option interest again today too.USDJPY: An orderly retreat now to test 147.00 amid the USD after flatlining. Yield differentials reducing finally but jury out on how long it lasts.EURJPY: Tightly bound still as EUR demand counters JPY demand. ECB casts a shadow. USDCHF: In retreat amid the USD supply and currently testing 0.9960-after capping at 1.0030 then 1.0000. EURCHF remains underpinned for the moment albeit off its highs but with SNB never far away and ECB looming. EURCHF: Holding 0.9860-80 now with EUR dip demand still into the ECB. SNB still keeping an eye and supporting dips too but rally sellers still poised.

AUDUSD: Holding 0.6300 and a strong rally helped by USD supply and some positives out of China to now mount a challenge on 0.6500.GBPAUD capping around 1.8000 again and looking to test 1.7850 as AUDUSD rally outstrips GBPUSD. NZDUSD finally breaking up through 0.5780 amid the USD supply and now through 0.5800 as I type.GBPNZD held 1.9750 to now test 1.9980 as I type. USDCAD: Broken down through 1.3650 then 1.3600 on the softer USD/firmer oil double whammy and now testing 1.3500. I expect two-way business overall still amid the fickle oil and risk variables. Jury out now on USD sentiment too though.

Interbank rates: 08.45 BST

GBPUSD 1.1565

EURUSD 1.0022

EURGBP 0.8660

GBPEUR 1.1532

GBPJPY 170.27

GBPCAD 1.5690

GBPCHF 1.1445

GBPZAR 20.8760

GBPHKD 9.0364

USDJPY 147.26

EURJPY 147.60

EURCHF 0.9912

EURHKD 7.8359

AUDUSD 0.6463

NZDUSD 0.5797

USDCAD 1.3553

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