Daily FX wrap: Risk off adds to AUD, CAD and NZD softness, but GBP targeted as we hit new post-Brexit lows across the board. EUR benefits again.
Some decent FX price action today, starting with AUD after the RBA meeting resulted in unchanged rates but with the central bank leaving the door open for further rate cuts ahead. Failing ahead of .7550, it was a cautious move below .7500, though as the risk mood soured through the day, the risk currencies moved lower in tandem.
CAD moved back through 1.2900 as oil prices also turned lower alongside the commodities spectrum. Genscape later in the day pushed USD/CAD to 1.2975 while the GDT auction showed softness in WMP to maintain pressure in NZD, albeit very modestly so.
However, moves here paled into insignificance in comparison to GBP, which saw a fresh hit – on renewed Brexit uncertainty – to send cable through the previous 1.3118 base, to take out 1.3100-80 and now eyeing a move on 1.3000.
EUR/GBP took out .8400, and has since gone on to remove decent offers ahead of .8500, topping out just ahead of .8550 but showing little sign that GBP sales are to abate. UK services PMIs saw modest weakness, but given the timeframe over which this has been measured, data series are of little relevance in the current climate.
US factory orders and durable goods also ignored, as all focus is on the US payrolls number on Friday. USD weakness seen vs the EUR largely on cross rate activity, but early reports of state aid for Italian banks prompted a EUR squeeze which was well contained ahead of 1.1200.
USD weakness against the JPY holding in the mid 101.00s as intervention fears deter an aggressive push (further) lower.