Jury out again as markets second-guess the Fed
Tuesday 9 August 2022
Variable risk sentiment this morning but underpinned still overall albeit with equity markets once more off their highs, gold firm and oil off its lows. All eyes currently on the US July inflation reading tomorrow which of course will send the algos and second-guessers into a frenzy for at least 5-10 minutes.....
USD tones gently softer but all ranging tightly in the past 24 hours.The Pound has had a little knock lower after BOE's Ramsden suggested that rate cuts/QE could well be appropriate next year... Clueless CBs as ever sticking a wet finger in the air. UK retail sales data looked ok the surface but a dig deeper reveals a less positive picture.
GBPUSD: Capped around 1.2135 this time but holding 1.2065 as we continue to range tightly. Some EURGBP helping to cap and I will stand poised to sell rallies as we continue to range with patience a virtue still.EURGBP: A good hold of 0.8420 and testing the 0.8450 area again as I type with EURUSD finding some decent dip demand. I still think we'll see two-way opportunity. GBPJPY: Now capped around 163.50 but underpinned at 162.50 as the risk jury remains out.
EURUSD: Support at 1.0185 this time then 1.0200, both levels where we have large option interest today and tomorrow. Now testing 1.0225 with rally sellers including me still poised. USDJPY: Holding 134.35-40 pivot area in yesterday's eventual retreat and bouncing back above 135.00. Some option interest tody should help cap in addition to the good offers into 135.50.
EURJPY: Forming a base around 137.30 again but capping into 138.00 with sellers poised still whenever risk turns amid general EUR weakness.USDCHF: Capped around the old line of 0.9560 amid some softer USD and EURCHF tones but holding 0.9520. SNB will be keeping an eye on things as ever. EURCHF: Extended retreat to an old line at 0.9720 after breaking 0.9760 with SNB watching/smoothing amid the variable risk and EUR tones but some inherent CHF demand still.
AUDUSD: Failure finally above 0.7000 but good support into 0.6960 still. GBPAUD capping at 1.7375 amid the general AUD strength but holding 1.7280 so far as AUDUSD falls back into 0.6980. NZDUSD capping around 0.6300 but finding suppoert at 0.6275 amid general USD softer tones. GBPNZD holding 1.9200 in the latest retreats after capping around 1.9275 as core pairs range tightly still. USDCAD: Holding 1.2840 after oil price rally/softer USD-led retreat from 1.2920.
Let's continue to be careful out there.
Interbank rates: 08.36 BST