Mixed risk tones as Russian attack continues.
Friday 25 February 2022
It appears that Putin is today launching his attack on Kyiv and although we've seen a few market jitters in the past hour sentiment seems to be firming a little after yesterday's fallout and USD gains across the board. Late European trading saw some USD supply and that continued into Asia but this morning some Greenback grabbing has returned with equity markets retreating a little too from their rally while markets factor in whatever the end-game might be.
Amid the mixed risk and USD tones Gold and Oil are off their highs and both have seen a decent retreat from yesterday's heady highs but remain underpinned. The month-end USD demand flow signals have certainly added some buying into the mix and notable yesterday heading into the 4pm London fix per my tweet as we dealt for the month-end Spot date. Meanwhile conjecture over Central Bank rate hikes also continues.
GBPUSD: A decent rally from the 1.3274 lows to 1.3439 before retreating to 1.3366 amid the mixed tones but it's all relative after yesterday's sharp fall. EURGBP: These uncertain times helping to contain as core pairs retreat and rally and we've seen another failure at 0.8380-85. GBPJPY: Finding support at 153.50 yesterday but failing at 155.00 in the subsequent rally where I warned of sell interest yesterday here.
EURUSD: A good hold of 1.1100 in yesterday's retreat but falling at 1.1230 and now 1.1173.USDJPY: A solid rally from that 114.40-50 support area to 115.70 amid the general USD demand and month-end flow that I've been warning about. EURJPY: Found demand/support around 128.00 but rally sellers prevailing at 129.50 in the relief rally still amid variable EUR sentiment currently being seen.USDCHF: A good hold 0.9180 amid the USD demand yesterday and a strong rally through the 0.9220-30 pivot area but sellers at 0.9280 helping to cap apart from the general USD retreat. EURCHF: 1.0280-00 duly providing support as USDCHF found its own line in the sand at 0.9180 with SNB still keeping a close watch and helped by some general EUR demand returning.
AUDUSD: The risk-off AUDJPY and AUDCHF supply along with the general USD demand yesterday saw a rapid steady fall into the 0.7100 support area after breaking the 0.7160-80 support and the 0.7150 option-assisted support. USDCAD: 1.2880 capped yesterday's move before the softer USD-led retreat to look at 1.2760-80 support but tempered by oil retreat too. Good two-way business still expected.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.35 GMT