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Greenback Sags With G10 FX Unwinding Monday Moves

FOREX

Profit taking was the main suspect as major FX pairs partially unwound yesterday's moves, with the wires flashing no apparent headline catalysts. The greenback retreated after its firm outperformance on Monday, while the sterling found poise after crashing in response to Cll'r Kwarteng's sweeping tax cut plans.

  • The BBDXY pulled back from its all-time high of 1,355 to last trade at 1,348. U.S. Tsys were struck by richening impetus, facilitating greenback losses. A rebound in e-minis reduced demand for safe haven currencies.
  • Cable added ~100 pips overnight after lodging a record low of $1.0350 on Monday. One-month option skews bounced from cyclical lows in tandem with the spot rate.
  • The kiwi dollar was the second-best performer in G10 FX space, another laggard-turned-leader. NZD/USD moved away from a cycle low printed at NZ$0.5625 on Monday, while AUD/NZD faltered in sync with AU/NZ 2-Year swap spread.
  • Hawkish revisions to sell-side RBNZ terminal-rate forecasts may have lent some support to the kiwi dollar as BNZ and TD Securities became the latest desks to pencil in additional rate hikes this cycle.
  • Today's data highlights include U.S. Conf. Board Consumer Confidence, new home sales & flash durable goods orders. Central bank speaker activity remains on high gear, with a suite of Fed, ECB, BoE & Riksbank members set to take the floor.
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Profit taking was the main suspect as major FX pairs partially unwound yesterday's moves, with the wires flashing no apparent headline catalysts. The greenback retreated after its firm outperformance on Monday, while the sterling found poise after crashing in response to Cll'r Kwarteng's sweeping tax cut plans.

  • The BBDXY pulled back from its all-time high of 1,355 to last trade at 1,348. U.S. Tsys were struck by richening impetus, facilitating greenback losses. A rebound in e-minis reduced demand for safe haven currencies.
  • Cable added ~100 pips overnight after lodging a record low of $1.0350 on Monday. One-month option skews bounced from cyclical lows in tandem with the spot rate.
  • The kiwi dollar was the second-best performer in G10 FX space, another laggard-turned-leader. NZD/USD moved away from a cycle low printed at NZ$0.5625 on Monday, while AUD/NZD faltered in sync with AU/NZ 2-Year swap spread.
  • Hawkish revisions to sell-side RBNZ terminal-rate forecasts may have lent some support to the kiwi dollar as BNZ and TD Securities became the latest desks to pencil in additional rate hikes this cycle.
  • Today's data highlights include U.S. Conf. Board Consumer Confidence, new home sales & flash durable goods orders. Central bank speaker activity remains on high gear, with a suite of Fed, ECB, BoE & Riksbank members set to take the floor.