Soggy sentiment still prevailing overall
Friday 24 March 2023
More up n down moves in the past 24 hours as the BOE hikes rates by 25bps as expected but with Bailey & Co a tad more cautious to the hawkish side after this weeks strong inflation data with only a nod to banking sector concerns and hopes/forecasts of lower inflation by the end of the year.
JPY demand notable again amid the fragile risk tones overall and with Japanese year-end JPY buying needs in play too. Crosses lower helping to cap/push core pairs lower too again as USDJPY breaks 130.00. Soggy German PMI data this morning will not please the ECB.
Equities still fragile and in retreat again as European trading gets fully underway while WTI found a base into $69.00 again after failing to hold above $71.50 but sellers capping now at $70.50 as the fragile/fickle risk tones. Gold has had another look at $2000 amid the fragile risk only to fall back again this morning but buyers poised $1960-80 again. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China tensions in the mix too currently exacerbated by Tik-Tok concerns.
GBPUSD: Capping at 1.2340 again yesterday post-BOE then 1.2300 helped by some softer risk GBPJPY supply and a few re-sells duly placed again up there. EURGBP: Capping around 0.8860 again as a little GBP demand came back in post-BOE moves and EUR supply returns and now testing 0.8800. Expect some more two-way trading as core pairs and risk both fluctuate. GBPJPY: Support line at 160.50 now history and now becomes decent resistance after failing around 161.75 with rally sellers prevailing as the uncertainty/fickle sentiment continues and core pairs head into reistance areas too.
EURUSD: Capping at 1.0900 then 1.0850 as the Euro rally petered out amid the fragile risk and some EURJPY supply along with soggy PMI data this morning which has seen a further push lower to 1.0775. Some pips banked along the way. USDJPY: Failing at 131.60 yesterday and a retreat to test 129.80-00 support this morning amid notable JPY demand again amid softer risk tones and some year-end flows. Pips gratefully banked along the way and I continue to favour rally sells and being long JPY on the crosses too overall.
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Interbank rates: 08.03 GMT