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  • Mike Paterson

More of the same

Wednesday 20 July 2022

Yes folks, nothing really to see for the moment. Still seeing some good two-way FX business with equities underpinned but oil and gold off their highs. Euro finding some dip support across the board again helped this morning by Draghi staying put for the moment at least.

AUD still being underpinned by expectations that the RBA will hike by 0.5% and Lowe only adding to that belief with some hawkish tones overnight.

UK inflation report didn't make pretty reading, adding to the worrying labour report yesterday, but Pound still ranging. BOE considering 50 bps for August but jury remains out.

GBPUSD: Failure into 1.2050 yesterday and a retreat to 1.1988 before a bounce to 1.2038 as we continue to range tightly.Pips banked in the retreat and rally resells duly made. EURGBP: Underpinned at 0.8500-10 but failure at 0.8540 again.GBPJPY: Better risk tones still underpinning and now finding at base at 165.50 after capping at 166.25 a few times as the JPY/risk jury remains out.

EURUSD: Underpinned at 1.0200-20 amid the softer USD tones, ECB rate hike hopes and Draghi staying but capping at fresh recent highs of 1.0275. Russian gas supplies, ECB rate hikes and recession remain the focus. USDJPY: A hold of 137.30 in yesterday's extended retreat amid softer USD tones before capping in the decent rally yet again at 138.40. EURJPY: Support around 141.20 now as risk remains firm and EUR demand overall but sellers poised still.USDCHF: Support now at 0.9675-80 but capping around 0.9700 so far with EURUSD underpinned and EURCHF slipping back from 0.9950 again. Jury remains out on SNB and amid variable risk but CHF still in demand as further tightening expected.EURCHF: Holding 0.9900 again amid some SNB support still I reckon but sellers prevailing at 0.9950 again too.

AUDUSD: A good base building at 0.6880 now amid the RBA rate hike hopes and firmer risk AUDJPY demand and now posting fresh recent highs of 0.6927. GBPAUD holding 1.7350 so far in latest retreat as AUDUSD rally outstrips GBPUSD. NZDUSD capping at 0.6275 this time after holding 0.6200-20 amid softer USD tones returning and some better risk. GBPNZD retreating through 1.9200 this time as NZDUSD rally outstrips GBPUSD. USDCAD: A solid cap at 1.2950 this time amid softer USD tones and firmer oil price and falling to 1.2855 I expect some good two-way business still overall amid the variable risk and USD tones but under a little pressure for the moment.

Let's continue to be careful out there.

Interbank rates: 09.47 BST

GBPUSD 1.2000

EURUSD 1.0228

EURGBP 0.8527

GBPEUR 1.1726

GBPJPY 165.64

GBPCAD 1.5444

GBPCHF 1.1634

GBPZAR 20.5315

GBPHKD 9.3480

USDJPY 138.15

EURJPY 141.27

EURCHF 0.9917

EURHKD 7.9720

AUDUSD 0.6906

USDCAD 1.2876

USDCHF 0.9700

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