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  • Writer's pictureMike Paterson

Greenback tumbles as US CPI retreats

Friday 11 November

Lest We Forget

Those wobbly risk tones of recent days are history as yesterday's weaker than expected US CPI data have given markets a big dose of happy-clappy medicine with equities, oil and gold all racing higher. Even cryptos have paused their decline for the moment. The Greenback has come in for a severe pounding as those rate hike expectations reduce for all markets but there will still be questions as to whether one set of data is excuse enough for such a shift in stance from the Fed.

Russian troops have allegedly been retreating from Kherson but still plenty of discussion as to Putin's real intentions. China relaxing some COVID restrictions has given equity bulls another cause to celebrate. UK GDP data came in on the soggy side this morning but not as bad a expected albeit still in negative territory thus adding fuel to the UK recessiomn fire. The Pound has largely brushed the news aside for the moment wih focus elsewhere. Veterans Day in the US sees bond markets closed but equity markets open. Expect reduced liquidity in FX pairs too. Some BOE and ECB speakers on the slate today too.

GBPUSD: A solid hold of 1.1360 provided the platform for the USD-supply rally post-CPI which saw 1.1750 before retreating but significantly held the key 1.1650 area and now back up to 1.1760. EURGBP: Underpinned at 0.8700 this time in the extended retreat as GBPUSD rally initiall outstripped EURUSD but reversing to post 0.8740 as I type as the jury remains out. I expect the two-way business to continue. Some option interest potentially in play again. GBPJPY: Capping at 167.50 and falling to 164.35 amid the accelerated USDJPY despite the better risk tones. Still tumbling as I type.

EURUSD: A solid hold of 0.9950 and rally to 1.0150 amid the USD supply. A further advance to 1.0245 as I type after holding 1.1050-60 in the retreat. Cross flows, risk, Ukraine all in the frame. Large option interest today at 1.0240.USDJPY: Capping at 146.50 and a real collapse amid the USD supply post-CPI data triggering stops along the way to post sub 140.50 lows before a bounce to 142.50 and some re-sells duly placed.EURJPY: Capping at 146.00 and solid retreat as USDJPY fall outstripped EURUSD rally despite firmer risk tones. USDCHF: Solid cap at 0.9900 then 0.9700 on the intitial bounce and now testing 0.9600 with falls only tempered by the EURCHF support from 0.9820 then 0.9840 albeit capping into 0.9880. EURCHF: Capping into 0.9880 this time but SNB support seemingly not far away between 0.9820-40.

AUDUSD: Formed a base around 0.6400 and an extended rally to 0.6670 this morning on the softer USD. NZDUSD rallying amid the softer USD tones with support at 0.5850 then 0.5950 and now testing 0.6050. USDCAD: A solid fall this time amid the softer USD/firmer oil double whammy and now testing 1.3275 from 1.3550.

Interbank rates: 08.22 GMT

GBPUSD 1.1722

EURUSD 1.0236

EURGBP 0.8731

GBPEUR 1.1450

GBPJPY 165.72

GBPCAD 1.5610

GBPCHF 1.1285

GBPZAR 20.2844

GBPHKD 9.1377

USDJPY 141.41

EURJPY 144.75

EURCHF 0.9867

EURHKD 7.9805

AUDUSD 0.6640

NZDUSD 0.6025

USDCAD 1.3314

USDCHF 0.9641

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