Daily FX Wrap: More GBP weakness attempted post UK manufacturing, but well contained ahead of BoE/QIR. Crude draw (DoE) giving CAD some n/t relief.
After the early action in GBP, there was very little action to note in the FX markets until the DoE report late in the day. Early on in London we saw UK industrial and manufacturing production coming in on the softer side, though upward revisions to the previous month, hitting GBP, but the moves looking exhausted – especially against the USD – with cable running into strong bids under 1.4400.
Resistance seen higher up ahead of 1.4475, but this was looking vulnerable late in the day as the 3.5mln draw in crude reported in the DoE pressured USD/CAD again, sparking off some USD selling across the board. EUR/USD looked to have a head start after moving back above 1.1400, on short covering and looking to the 1.1450 level into the London close. Cable is also pressing on the earlier mentioned selling interest while AUD/USD is fighting the selling interest ahead of .7400.
It was a relatively quiet session for the JPY pairs, with the equity markets pretty quiet overall. We saw modest losses in the euro bourses, and similar on Wall Street. USD/JPY is looking comfortable in the mid 108.00’s for now, but looking a touch heavy again. Big day for GBP ahead with the BoE announcements and QIR report. GBP limits on both sides standing firm for now.