FOREX: EURUSD Extends Sharp Gains, Eyes 2022 Highs ~1.1500
Apr-11 09:26
- The relentless dollar selling across Thursday has filtered through into Friday’s session, culminating in a further 1.5% depreciation for the US dollar index to levels below the psychological 100.00 mark. Price action has been exacerbated by China announcing additional tariffs on US goods, reaching 125%.
- The Euro has been the key beneficiary of price dynamics this morning. Intra-day EURUSD gains currently stand at ~2%, however spot managed to reach as high as 1.0473, placing the pair at its highest level since early 2022.
- This has substantially narrowed the gap to 1.1495, the Feb 10 2022 high and a key medium term technical point. Should the blowout price action continue, a Fibonacci projection level at 1.1555 is notable. Initial support lies at the 1.1144 breakout level.
- Greenback losses have remained broad based, with the safe haven JPY and CHF also trading in a constructive manner. USDJPY has traded as low as 142.07, extending a clean break below 144 overnight. Sights are on 141.65 next, the Sep 30 ‘24 low.
- For USDCHF, price action has remained aggressive following the break of 0.8333 yesterday. The pair continues to trade at fresh ten-year lows, printing 0.8111 this morning. Emphasising the severity of the move, this extends the USDCHF selloff from the February highs to 11.8%. The next target for the move is at 0.8028 - 1.382 projection of the May 1 '24 - Sep 6 '24 - Jan 13 price swing.
- The China tariff news is weighing on the AUD, a relative underperformer in G10, and even diverging from its antipodean counterpart (AUDNZD down 1.3%).
- US PPI and preliminary U Mich sentiment data highlights the data calendar on Friday.
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Historical bullets
FOREX: FX Exchange traded Roll pace
Mar-12 09:17
Expiry Next Monday the 17th.
- EUR: 36%.
- GBP: 33%.
- JPY: 45% (above pace).
- CHF: 32%.
- CAD: 33%.
- AUD: 42%.
- NZD: 44% (above pace).
- SEK: 54% (above pace).
- NOK: 47% (above pace).
EURIBOR OPTIONS: Put fly buyer
Mar-12 09:12
ERJ5 97.6875/97.62/97.5625p fly, bought for 0.75 in 10k.
BUNDS: /SWAPS: Modest Bid On Green's Reaffirming Fiscal Position Fades
Mar-12 09:05
A modest bid in German bonds on the back of Habeck reaffirming the known stance of the Greens when it comes to debt brake reform.
- While the Greens continue to voice their well-documented concerns surrounding defence spending, the door to fiscal negotiations and a deal in the immediate term seems to remain open.
- That explains the limited market reaction in German paper, with the major futures contracts already back from their knee-jerk highs.
- Long end ASWS vs. 3-month Euribor similarly muted, widening by ~0.5bp before fading.
