Move over FOMC. Bring on the MPC.
Thursday 17 March 2022
Last night saw the latest rate/policy decision from the US Federal Reserve and they duly delivered a 0.25% hike with mixed tones in the rhetoric. Attention remains on the overall tightening policy and further hikes to come clearly signalled but caution needed over the Ukraine fall-out. Today sees the BOE take their turn to try and make sense of it all and a 0.25% hike seems nailed on and helping to underpin the Pound still. As always the devil is in the detail so let the algos do the heavy week and stand by to respond or place wish-list orders prior. My 1-2-1 sessions explain this in more detail.
Sad times in Ukraine still and the Greenback has seen some supply return post-FOMC per my tweet while equity markets sre off their highs after yesterday's strong rally but underpinned still.Gold and oil are finding dip support again while FX pairs continue with their fragile/fickle price action.
GBPUSD: Finding a base post-FOMC at 1.3040 per my tweet last night and testing 1.3200 but capping so far. I remain a rally sellers overall expecting BOE to remain cautious in these troubled times.
EURGBP: Decent cap at 0.8420 then 0.8400 with a retreat to 0.8370 as I type amid the general GBP demand. More two-way business expected with BOE lurking. Options in play nearby today.GBPJPY: Support at 154.60 then 155.50 amid yesterday' risk on rally and testing 156.50 now amid the added GBP demand. The jury remains out.
EURUSD: Holding 1.0950 post-FOMC and since testing 1.1060 amid the generally softer USD tones. USDJPY: 118.50-60 currently supporting per my tweet post-FOMC after capping into 119.20. Expecting some year-end JPY repatriation still. EURJPY: Support now at 130.80 with failure into 131.40 so far in these ever fickle times.
USDCHF: Still holding 0.9390 in the latest retreat after testing 0.9460 this time with EURCHF support again after a hold of 1.0360 with SNB shadow lurking amid the fragile backdrop. EURCHF: Support at 1.0360 now with SNB lurking in the dips. Rally sellers poised still though.
AUDUSD: Holding 0.7300 in the latest retreat and testing 0.7340 amid the softer USD tones and return of some commodity-ccy demand. NZDUSD has held 0.6750 and now back up through 0.6830 again also amid softer USD and commodity sentiment. USDCAD: Holding 1.2650 so far after the steady retreat amid the softer USD/firmer oil double whammy with some CADJPY demand too. Two-way business expected amid all the uncertainty still.Caution required though with so many variables.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.40 GMT