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FX Snapshot
Major Currencies Performance
Source: Bloomberg L.P., as of Jun 3, 2022 (cut off time is NY Time 5:00pm); Citi (forecasts as of May 19, 2022)
CCY
Last Trading Day Change
Weekly Change
1 month high
1 month low
1 month change
3 month high
3 month low
3 month change
52 week high
52 week low
Year-To- Date Change USD 102.14 0.5% 104.85 101.67 -1.3% 104.85 97.79 4.5% 105.01 89.84 6.7% EUR/USD 1.0719^ -0.1%^ 1.0779^ 1.0380^ 1.9%^ 1.1159^ 1.0380^ -3.1%^ 1.2218^ 1.0350^ -5.6% USD/JPY 130.88 3.0% 130.88 126.83 0.6% 130.88 114.82 13.4% 131.35 108.72 12.0% GBP/USD 1.2488 -1.1% 1.2652 1.2202 -0.1% 1.3348 1.2202 -6.4% 1.4190 1.2156 -7.6% USD/CAD 1.2594^ -1.0%^ 1.3046^ 1.2570^ -1.9%^ 1.3046^ 1.2477^ -0.7%^ 1.3077^ 1.2057^ -0.4% AUD/USD 0.7207 0.6% 0.7265 0.6856 1.6% 0.7579 0.6856 -1.7% 0.7776 0.6829 -0.7% NZD/USD 0.6510 -0.3% 0.6559 0.6232 1.1% 0.6978 0.6232 -4.3% 0.7243 0.6217 -4.6% USD/CHF 0.9621^ 0.6%^ 1.0032^ 0.9568^ -1.7%^ 1.0032^ 0.9167^ 4.9%^ 1.0065^ 0.8926^ 5.1% USD/CNY -- -- 6.7893 6.6498 0.8% 6.7893 6.3177 5.4% 6.8125 6.3065 4.6% USD/CNH 6.6557 -1.0% 6.8273 6.6223 0.1% 6.8273 6.3225 5.3% 6.8380 6.3060 4.3% GOLD 1851.19 -0.1% 1883.81 1811.79 -0.9% 2050.76 1811.79 -4.4% 2070.44 1690.61 1.3%
CCY
Last Trading Day Change Technical levels Citi Forecasts
Close Day High Day Low (^) ChangeDaily Sup2 Sup1 Res1 Res2 0-3M 6-12M LT
USD 102.14 102.23 101.64 0.31% 100.00 101.03 105.00 106.56 107.41 107.34 99. EUR/USD 1.0719 1.0764 1.0704 -0.26% 1.0341 1.0585 1.0790 1.0857 1.00 1.02 1. USD/JPY (^) 130.88 130.98 129.69 0.80% 126.36 126.94 131.35 135.00 126 135 122 GBP/USD (^) 1.2488 1.2590 1.2486 -0.72% 1.2076 1.2164 1.2676 1.2763 1.18 1.20 1. USD/CAD (^) 1.2594 1.2596 1.2551 0.19% 1.2403 1.2451 1.2878 1.2901 1.31 1.33 1. AUD/USD 0.7207 0.7283 0.7202 -0.80% 0.6777 0.6829 0.7314 0.7458 0.66 0.68 0. NZD/USD 0.6510 0.6576 0.6501 -0.75% 0.6176 0.6217 0.6673 0.6702 0.60 0.61 0. USD/CHF (^) 0.9621 0.9643 0.9557 0.42% 0.9243 0.9460 1.0129 1.0344 1.00 1.03 0. USD/CNY -- -- -- -- -- -- -- -- 6.90 6.90 6. USD/CNH 6.6557 6.6675 6.6170 -0.02% 6.6120 6.6479 6.8380 6.8457 -- -- -- GOLD 1851.19 1874.12 1847.43 -0.93% $1,754 $1,780 $1,998 $2,035 $1,825 $1,900 --
*INVESTMENT PRODUCTS: NOT A BANK DEPOSIT. NOT GOVERNMENT INSURED. NO BANK GUARANTEE. MAY LOSE VALUE
June 6, 2022
Source: Bloomberg L.P. (K = Thousand, M = Million, B = Billion)
Important Economic Data (Jun 7, 2021 – Jun 10, 2022)
Time Event
Perio d
Actual Survey Prior
Tuesday
06/07/22 12:30 AU RBA Cash Rate Target Jun -- (^) -- 0.35%
06/07/22 16:30 UK S&P Global/CIPS UK Services PMI May -- (^) -- 51.
06/07/22 20:30 US Trade Balance Apr -- (^) -$89.7b -$109.8b
06/07/22 20:30 CA Int'l Merchandise Trade Apr -- (^) -- 2.49b
Wednesday 06/08/22 07:50 JN GDP Annualized SA QoQ 1Q -- (^) -- -1.00%
06/08/22 17:00 EC GDP SA YoY 1Q -- (^) -- 5.10%
Thursday
06/09/22 07:01 UK RICS House Price Balance May -- (^) -- 80%
06/09/22 19:45 EC ECB Main Refinancing Rate Jun -- (^) -- 0.00%
06/09/22 20:30 US Initial Jobless Claims Jun -- (^) -- --
06/09/22 CH Trade Balance May -- (^) $61.00b $51.12b 06/09/22 CH Exports YoY May -- (^) 8.90% 3.90%
06/09/22 CH Imports YoY May -- (^) 2.90% 0.00%
Friday
06/10/22 09:30 CH CPI YoY May -- 2.30% 2.10%
06/10/22 20:30 CA Net Change in Employment May -- (^) -- 15.3k
06/10/22 20:30 CA Unemployment Rate May -- (^) -- 5.20%
06/10/22 20:30 US CPI YoY May -- (^) 8.20% 8.30% 06/10/22 20:30 US CPI Ex Food and Energy YoY May -- (^) 5.90% 6.20%
06/10/22 22:00 US U. of Mich. Sentiment Jun -- (^59) 58.
NZD Citi views & strategy Bias/ Forecasts/ Key levels
Citi FX outlook
A more aggressive RBNZ rates profile plus the prospect of a rebounding in NZ’s terms of trade may not extract much further gains against a well-supported USD but may see more resilience reflected vs JPY (weighed down by a dovish BoJ) and EUR (hit by the terms of trade shock from current geopolitical tensions).
Previously
- NZDUSD: 6 – 12 months: 0.
- NZDUSD: Longer term: 0. Currently (as of May):
- NZDUSD: 6 – 12 months: 0.
- NZDUSD: Longer term: 0.
- MT Bias: Moderately bearish NZD vs USD and AUD
- Tactically NZD a buy on dips vs USD
- Tactically bullish NZD vs EUR, CHF, GBP and JPY
CAD Citi views & strategy Bias/ Forecasts/ Key levels
Citi FX outlook
Rates continue to support CAD as one of the better-performing G10 FX, especially on non- USD crosses. The commodities outlook is also helping to elevate CAD as Canada’s terms of trade outlook continues to rise, supported by higher oil prices. All this makes CAD more resilient for now especially against funders (EUR, CHF and JPY) but also against the likes of GBP and NZD (both energy importers) and a buy on dips vs USD. USDCAD is trading around the 1.2800 level and may move toward former resistance (now support) at 1.2676.
Previously
- USDCAD: 6 – 12mth: 1.
- USDCAD: LT: 1.
Currently (as of May):
- USDCAD: 6 – 12mth: 1.
- USDCAD: LT: 1.
- Tactically bullish CAD vs EUR, GBP, CHF and JPY
- Tactically CAD a buy on dips vs USD
Commodity Blocs
AUD Citi views & strategy Bias/ Forecasts/ Key levels
Citi FX outlook
Citi does not rule out 40bp (or more) rate hike though the expectation is largely for a 25bp hike in June followed by a pause in July and a 50bps hike in August, taking the RBA cash rate to 1.35% by year-end. AUD continues to look “cheap” from a terms of trade perspective against funding currencies (EUR, CHF, GBP and JPY) while against USD, any renewed push to sub 0.7000 on further routs in risk assets may encourage bargain hunting buying in the pair. Key support in AUDUSD lies at 0.6777 (June 2020).
Previously
- AUDUSD: 6 – 12mths: 0.
- AUDUSD: LT: 0. Currently (as of May):
- AUDUSD: 6 – 12mths: 0.
- AUDUSD: LT: 0.
- MT bias: Moderately bearish AUD vs USD; Moderately bullish AUD vs NZD
- Tactically buy on dips vs USD < 0.
- Tactically bullish AUD vs EUR, CHF, GBP and JPY
GBP Citi views & strategy Bias/ Forecasts/ Key levels
Citi FX outlook
The BoE continues to toe a fine line between supporting growth and managing inflation risks. Any data that lowers the pressure on BoE to be more aggressive in its tightening posture may be welcomed as a growth- positive support for sterling. Sterling fundamentals still warrant underperformance against Commodity FX (AUD, NZD, CAD) while on cable, the 1.20- support area remains key. GBPUSD has completed a bullish outside day with a close above 1.2380 which targets a test of horizontal resistance at 1.2640 (May 2022 high).
Previously
- GBPUSD: 6 – 12mths: 1.
- GBPUSD: LT: 1.
Currently (as of May):
- GBPUSD: 6 – 12mth: 1.
- GBPUSD: LT: 1.
- MT bias: Moderately bearish GBP vs USD and EUR
- Tactically neutral GBP vs USD
- Tactically bearish GBP vs Commodity FX (AUD, NZD, CAD), SGD and CHF
European Currencies
EUR Citi views & strategy Bias/ Forecasts/ Key levels
Citi FX outlook
EUR’s inability to rally beyond the 1.05- level is largely attributed to lagging real yields that reflect the hit to euro area growth from high energy costs emanating from the Russia
- Ukraine conflict. Whether EURUSD reaches parity though is debatable though for now there seems little to mount a defense for EUR upside which retains its status as a funding currency to buy SGD and commodity FX (AUD, NZD, CAD). The pair is back within the 1.047-1.064 range after experiencing positive momentum divergence that may suggest a move higher toward resistance at 1.064 (May 2022 high).
Previously
- EURUSD: 6 – 12m: 1.
- EURUSD: LT: 1.
Currently (as of May):
- EURUSD: 6 – 12m: 1.
- EURUSD: LT: 1.
- MT bias: Bearish EUR vs USD
- Tactically bearish EUR vs USD, Commodity FX (AUD, NZD, CAD), and CHF
USD Citi views & strategy Bias/ Forecasts/ Key levels
Citi FX outlook
USD may have support from global risk aversion and monetary policy differentials. DXY’s recent retracement after hitting a high of 105.005, seems to largely reflect positioning adjustments given near extended USD longs and the correction likely provides a healthier platform for “dip buying” sentiment to re-emerge though upside momentum may slow as parts of risk FX (AUD) and EM (SGD) start to show “value”. However, other G10 majors - EUR, GBP, CHF, JPY and CNH remain a “sell on rallies” versus USD. DXY is back below 103.82 (2017 high) and suggest a test of 55d MA around 100 with intermediate support at 102.99 (double bottom neckline) and 102.35.
Previous month:
- DXY: 6 – 12m: 99.
- DXY: LT: 97.
Currently (as of May):
- DXY: 6 – 12m: 107.
- DXY: LT: 99.
- MT bias: Bullish DXY
- Tactically bullish USD vs EUR
- Tactically USD a sell on strength vs AUD, NZD, CAD and SGD
- Tactically neutral USD vs GBP
CNH Citi views & strategy Bias/ Forecasts/ Key levels
Citi FX outlook
The bottom line remains unchanged - RMB’s weakened fundamentals (demand destruction from Covid lockdowns, erosion of “positive carry” and China’s mixed export outlook) can still drive further RMB depreciation towards 7.00 albeit at a slower pace of depreciation. USDCNH has completed a bearish outside day with a close below 6.734, that could suggest a test of former resistance (now support) at 6.698, with potential to extend lower to 6.609 (May 2022 low).
Previously
- USDCNH: 6 – 12mths: 6.
- USDCNH: Longer term: 5.
Currently (as of May):
- USDCNH: 6 – 12mths: 6.
- USDCNH: Longer term: 6.
- MT bias: Bearish RMB vs USD; Mildly Bullish RMB vs EUR
- Tactically bearish RMB vs USD
USD and EM Currency
Commodity Bloc
AUD
- Moderately bullish AUDUSD near term
- Remain supported on Terms of Trade dynamics and more hawkish RBA
- More bearish medium term
- Monetary policy divergence dynamics may underpin a resilient DXY
CAD
- Commodities outlook driving CAD outperformance
- Expect 50bp hikes again in June and July. Policy rates reaching 3.0% by year-end
- More bearish medium term
- Monetary policy divergence dynamics may underpin a resilient DXY
NZD
- Higher “carry” may translate into more resilience against JPY and EUR
- Gains in dairy prices partially offsetting the energy terms of trade loss
- Difficult to see NZD extracting much further gains against a well-supported USD
- Potentially lower terminal rate of around 2.5% vs 3.0% prior
Euro Bloc
GBP
- Prospect of higher UK rates may support cable in the low 1.30s
- Resilience against funders (EUR and JPY)
- The prospect of cutting rates in 2023 suggests very limited upside
- Underperform the Commodity FX complex (AUD and CAD)
EUR
- Longer term, ECB hiking rates back to zero may be supportive
- A meaningful recovery in EUR looks unlikely near term
- Relative data matters for EURUSD
- Whilst Europe is flirting with recession, US demand picture looks substantially stronger
Safe-haven
JPY
- Not expect any actual intervention before at least the 130 level is met
- Yen’s status as a funding currency remains unchanged
- To finance longs in Commodity FX (AUD, NZD, CAD) and USD
- The path of least resistance for a weaker Yen unchanged
CHF
- SNB remains reluctant to turn dovish
- A strong currency remains an effective cushion to higher inflation
- The SNB may attempt to weaken the franc to the 1.10 area vs EUR
- Once Swiss (and global) inflation declines
EMFX
CNH
- Benefited from China’s sizable trade surplus & net FDI flows.
- Global geopolitical tensions may have reinforced a view of the RMB as a “safe” currency
- Fixed income flows into China are expected to decline given narrowing rate differentials
- US and China’s trade surplus may subdue notably this year
