Free Trial

Sterling Surges After Super Thursday Elections, Yen Loses Ground

FOREX

Sterling caught a bid and led gains among the G10 pack as BBG trader sources cited interbank buying by Japanese bank, which squeezed weak short-stops in cable, while participants scrutinised the results of the UK's "Super Thursday" elections. The Tories made further inroads into traditional Labour strongholds, while Labour's Khan was re-elected as London Mayor by a slimmer margin than expected. Elsewhere, the SNP fell one seat short of an outright majority in Scotland's devolved parliament. Some may interpreted the SNP's sub-50% result as a positive, even as the party is expected to team up with pro-independence Greens in launching another bid to separate Scotland from the rest of the UK. Cable rallied to levels not seen since Feb 25.

  • The yen went offered across the board amid a decent showing from regional equity benchmarks (ex-China), with e-minis printing fresh record highs. Local Covid-19 situation remained a source of worry, with questions re: implications for the Tokyo Olympics doing the rounds. USD/JPY roughly halved Friday's post-NFP losses.
  • USD/CNH firmed a tad, with a weaker than expected PBOC fix helping keep the rate afloat. China's central bank set their USD/CNY mid-point at CNY6.4425, 55 pips above sell-side estimates, in a sign that officials are willing to reign in redback appreciation. The fixing came after post-NFP dollar sales took USD/CNH close to its three-year lows on Friday.
  • Early trade saw commodity-tied FX draw some support from supply concerns linked to Friday's cyberattack on a critical U.S. fuel pipeline network. The initial impetus seemingly faded away as crude oil, gasoline & heating oil pulled back from their respective highs.
  • Norwegian CPI, Rinksbank Apr MonPol meeting minutes as well as comments from Fed's Evans & Riksbank's Ohlsson headline today's thin economic docket.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.