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  • Mike Paterson

Rollercoaster start to the week

Monday 12 September 2022

RIP Queen Elizabeth II

Long live the King

USD supply has renewed this morning after some gapping and retreat in Asia most notably in EURUSD following the seemingly positive news out of Ukraine (albeit we have to be wary of the fall-out too), and hawkish talk from ECB sources on Saturday. Equity markets remain underpinned and rallying strongly this morning as has Gold which has found some dip demand into $1710 this time to post $1726. Oil too is off its lows and joining in the feel-good rallies but the fragile global economic backstory continues.

GBPUSD: Holding 1.1550 in Friday's retreat from 1.1650 and then 1.1600 in Asia amid the USD supply/GBPJPY demand risk-on demand but rallies tempered into 1.1700 by the EURGBP demand. Patience a virtue still but I prefer the rally-sell side and ever-poised. Cross flows, notably GBPJPY and EURGBP still having an impact.EURGBP: Holding 0.8660 then 0.8680 and spiking up above 0.8700 this morning on the EURGBP demand. Two-way business expected still up here as jury remains out.

GBPJPY: Capped at 167.00 so far this morning after the strong risk-on rally from 165.50 . I still think we can expect some fragile price action amid the fragile global backstory.

EURUSD: Initial gap with Asia opening around 1.0130 before a quick retreat but holding at 1.0060 and a spike this morning as European markets got fully underway. USD supply, seemingly good news out of Ukraine (but beware the wounded animal...) and the ECB rhetoric over the weekend all providing fresh ammunition for more liquid markets to relish in but finding 1.0200 a step too far for the moment. Rally sellers including me still poised but caution advised for the moment. USDJPY: Capped at 144.00 on Friday then 143.50 in Asia amid the general USD supply after a good hold of 142.00 and now posting 142.71 again in the retreat. Definitely expecting more 2-way business. EURJPY: Support still at 143.50 and now 144.50 amid the EUR demand/risk-on double whammy but capping at 145.50 so far with the USDJPY retreat. Expect some two-way business still. USDCHF: Still looking soggy and capping into 0.9650 this time and now testing 0.9550 on the latest retreat amid the softer USD tones and the natural CHF demand but some support coming in from the EURCHF spike this morning.EURCHF: Testing 0.9660 again this morning after holding 0.9630 on Friday but capping at 0.9740 so far still helped by some general CHF demand to temper the better-risk/EUR demand.

AUDUSD: A good hold of 0.6825 in Asia has provided a platform for a rally to test 0.6880 amid the USD supply/AUDJPY demand yesterday. GBPAUD retreating from 1.7150 in a straight line to 1.7000 as AUDUSD rally outstripped GBPUSD abut finding support at 1.6950. NZD holding 0.6060 again and then 0.6100 amid the USD supply to post 0.6150 so far.GBPNZD capped at 1.9250 this time and posting 1.9000 as I type as NZD rally Outstrips GBPUSD. USDCAD: Capped around 1.3050 this time amid the USD supply and with oil rallying.Expecting some two-way business overall still amid the fickle variables.

Let's continue to be careful out there.

Interbank rates: 09.30 BST

GBPUSD 1.1694

EURUSD 1.0190

EURGBP 0.8712

GBPEUR 1.1476

GBPJPY 166.89

GBPCAD 1.5175

GBPCHF 1.1162

GBPZAR 19.9645

GBPHKD 9.1065

USDJPY 142.70

EURJPY 145.44

EURCHF 0.9716

EURHKD 7.9325

AUDUSD 0.6885

NZDUSD 0.6154

USDCAD 1.2980

USDCHF 0.9536

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