Move over FOMC. Bring on the ECB and UK General Election
Thursday 12 December 2019
The week's focus was always going to be about today's UK General Election but last night saw the FOMC keep rates on hold as expected with some dovish/cautious outlook again that brought some USD supply. Now UK voters
are heading to the polling booths with exit polls due at 22.00 GMT but meanwhile we have the latest ECB decision and the first with Lagarde at the helm.
GBPUSD has posted fresh highs of 1.3230 before retreating but continues to be underpinned with Tory majority expectations still to the positive side. More expiries today at 1.3150 (GBP500m) and 1.3200 (1.1bln)in play until 15.00 GMT. EURGBP remains tightly bound with core pairs both rallying post-FOMC but GBPJPY has bounced from 142.50 to post 143.65 again and remains underpinned.
I continue to stay poised and sell when upside momentum fades but respecting the current demand still. All focus on today's election outcome and I will email you some more thoughts/scenarios for that later today with updated order boards. I also plan to be at my desk as the first results come through.
EURUSD has broken up through 1.1100-10 and should help cap rallies. More expiry interest in play today at 1.1090-00(EUR 2.2bln), 1.1120-25(1bln), 1.1140-50(950mln). I will mail some post-ECB thoughts but I'm not expecting any change in policy although we could see some volatility in the presser as Lagarde makes her debut.
USDJPY is holding around 108.50 still with limited fallout post-FOMC as risk sentiment remains slightly positive but still not rallying too far. USDCHF has fallen further post-FOMC as EURUSD rallies and EURCHF still finding a few sellers.The SNB being ever vigilant albeit not seemingly in a rush to stem the CHF demand for the moment. This morning's SNB decision saw rates, policy and rhetoric all unchanged as expected.
AUDUSD has made decent gains in the last the 24 hours amid softer USD, better risk sentiment and 1.3bln in expiries tomorrow between 0.6885-00 all having a say. USDCAD has retreated to test 1.3150 on the post-FOMC USD supply/firm oil double whammy.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Have a good day out there one and all.
Interbank rates: 08.30 GMT