Daily FX Wrap: A quiet day in the absence of NY (Thanksgiving), but new USD highs vs JPY, EUR and CHF. AUD outperforms modestly. GBP range bound.
We saw some early action in the FX markets, with the USD pushing for new highs; achieving 113.53 against the JPY, 1.0517 vs the EUR and 1.01910 vs CHF. The market can do little more than try and jump on the USD train which has been at full pace in the last 2 weeks, with little room for pause and continuing to show prospects for further gains.
The next major hurdle is 1.0500 in EUR/USD, below which lies the Dec 2015 low at 1.0456 which stands in the way of parity. Looking to next week, the Italian referendum will be the focus for all EUR pairings, but a significant part of this risk may well have been priced in, but this may be hard to discern given the USD dominance. EUR/JPY may see greater focus, with the risk on mood lifting this cross rate to highs a little short of 120.00, while EUR/CHF has been contained ahead of 1.0700, though we expect there has been some official ‘support’ at hand.
The German IFO survey was today’s major release amid the US Thanksgiving holiday, coming in a touch better than expected in the current assessment but falling short of consensus in the business climate and expectations.
AUD has outperformed to a modest degree with the rise in Copper prices, testing through .7400 while AUD/NZD has moved up towards 1.0600.
USD/CAD has been range bound, with resistance ahead of 1.3600 still vulnerable as Oil producers continue to thrash out a ‘deal’ cable has again tested 1.2500 as bids ahead of 1.2300 continue to support, but we remain every wary of EUR/GBP at these levels, especially as we near month end (flow). The mid .8400’s are finding some support near term.