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USD Breaks Through 92.50

ByTalking Forex
Published 05/03/2016, 11:03 AM
Updated 07/09/2023, 06:31 AM

The early FX price action today was dominated by the USD index breaking through the 92.50 level yesterday, with many questioning the validity of such an overly dovish view on the USD. New highs in cable saw 1.4770 trade, while relentless pressure on USD/CAD saw 1.2500 finally giving way, but to all of 40 ticks below here before the sharp turnaround. All eyes were on USD/JPY and EUR/USD however, where the former trade within 5 ticks of 105.00 before leveling out, though we are far from citing a recovery here, especially with Wall Street deep in the red as we go into the London close. EUR/USD gains through 1.1500 have led to 1.1600 also being taken out, but not too much time spent above here before the turnaround back under 1.1550. Early on in London, UK manufacturing PMIs were a key factor in generating the reversal in cable, which has now extended 2 cents from the highs mentioned above. The index has now fallen below the 50.0 pivot (49.2), but with the latest ICM EU poll showing the leave camp in the lead, GBP losses are not too hard to reason out. The CAD retrace was purely oil led as WTI has taken out $44.0, while in the overnight session, the RBA rate cut had the AUD on the back foot through the day, and we are now eyeing stops through .7500 here. NZD is proving resilient though despite the GDT index falling 1.4% in the latest auctions. WMP rose a mere 0.7% vs futures pricing in a 5% rise.

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