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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.
FOREX
USD losses have continued, with the BBDXY now off by ~0.30%, last tracking under 1252. Through December the index has found support around the 1250 level, see the chart below. The set up for the DXY is a little less adverse but this index is also down by a similar amount for the session (last around 103.85/90).
- Similar drivers of USD weakness appear are still in play that were evident earlier (firmer equities/lower US cash Tsy yields). The bigger shift has come from gains seen for regional equities, particularly in Hong Kong.
- The A$ has jumped ahead of the yen to be the leader of G10 moves. AUD/USD is now +0.80% for the day, near 0.6760. Higher AU government bond yields are helping, +5/+7bps across the curve. Firmer commodity prices are as well (copper +0.80% CMX basis), although iron ore has moved down from recent highs, last around $111.50/tonne.
- NZD/USD has been dragged higher, back to 0.6320. The AUD/NZD cross is still rising though. The pair got to 1.0700, fresh highs back to the start of the month, before selling interest emerged. The above-mentioned yield momentum is also likely to be biasing AUD higher.
- USD/JPY hit a low of 131.65, but we are now back to 131.80/85. Still 0.50% higher for the yen so far. Yesterday's low in the pair came around the 131.50 region.
- GDP revisions for the UK and US dominate the data calendar later on, with US jobless claims also due.
Fig 1: BBDXY Approaching December Lows
Source: MNI - Market News/Bloomberg
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.
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