FX Daily07:13 CET12 October 2022https://research.ca-cib.comUsD:"The dollar is our currency,but it'syour problem...Asia overnightDuring Asia, an FT report saying the BoE could extend its Gilt buying programmeValentin MarinovHead of G10 FX Strategybeyond 14 October if market conditions necessitate it provided the GBP and risk+44 20 7214 5289wo0.qo-e9g4oujewrugu9ehigher, so too was a modest majority of_Asian bourses., The GBP was theoutperformer in G10 FX in Asia while the AUD and JPY were the underperformers.David ForresterA dovish RBA speech and weak iron ore prices weighed on the AUD. The absenceSenior FX Strategistof BoJ FX intervention even though USD/JPY rallied above 146 weighed on the+852 2826 1529JPYdavid.foester@ce-cib.comUSD: "The dollar is our currency, but it's your problem..."Alexandre DolciAhead of the meeting of the G20 finance ministers and central bank governorsFX Strategisttoday and tomorrow in Washington DC, FX investors have been speculating about+44 20 7214 5064the prospects for a concerted intervention to weaken the USD across the board.alessncre.dolci@ca-cb.comThe main argument brought forward in favour of a potential Plaza Accord 2.0 is thetherefore the global growth outlook, Indeed, recently the BoJ had to intervene tostabilise USD/JPY while central banks like the ECB had to hike more aggressively10 Oct FX Positioning: shor EUR/USD &AUDUSD long NZDUSD and USDPYto stabilise their own currencies. Last but not least, GBP/USD collapsed to an all-07 OctFX Weekly: USD: Plaza discordtime low amidst gilt market turmoil last week. Another reason for a concerted action06 Oct FX Volatity Monitor: IntenventionIndeed, the central banks that intervene to defend their currencies vs the USD tendafermathto sell US fixed income securities and thus boost the USD rate advantage. The05 Oct FX Focus: GBP: fear, FEER andstrong USD and growing funding costs have made the servicing of USD debt moreaBEERexpensive. According to the latest BIS data, the total amount of USD credit to non-vs USD)bank borrowers outside of the US has grown by 3% YoY to more than USD13trnGBPse speeids des siseq ouenossoun jo buuepm dies e or pe sey sn Jowell as FRA-OIS spreads of lateSEKNOKWe worry that the meetings in Washington will highlight the lingering discordamong G20 finance ministers and central bankers, with the US in particular sillCHFopposed to any measures to cheapen the USD and adopting a stance that can be■NZDsummarised with the famous quote of US Treasury Secretary John Connally fromEURCADalso think that the updated G20 communique may make a more explicit referenceAUDto the recent USD appreciation and even allow individual member states somewhatAdr0.4-0.20.20.4 from here less certain and thus can fuel FX volatility.Source: Bloombevo, Creolir Agricole C/BJPY: problems with the USD1Mmplied volatility daily change (net,USD/JPY has surpassed intervention levels and broken through 146 in a test tothe MoF's resolve to hold the line. In terms of technical resistance, there is notJPYmuch in the way of further USD/JPY strength until the 1998 Asian Financial CrisisGBPhigh of 147.66. There is also likely little help for the JPY on the macroeconomicNZDfront in the coming day(s). The FOMC Minutes later today are likely to point to theSEKramping of the FOMC's hawkishness and dot plots. US CPI data on Thursday willNOKlikely demonstrate further stickiness in inflation, And, the G2O meeting of financeminister and central bankers in Washington today and Thursday is unlikely see theAUDUS bend on its strong USD policy. There has been some verbal intervention toCHFsupport the JPY with Finance Minister Shun'ichi Suzuki saying he is watching FXEURmoves with a sense of urgency. Chief Cabinet Secretary Hirokazu Matsuno hasCADmoves. The verbal interventions so far are rating a 6 out of 7 on our intervention00.20.40.6 scale (7 being warning of imminent intervention). Indeed, BoJ Governor HaruhikoSource: Bloomberg, Credit Agricole CIBCREDITAGRICOLE1 FX Daily12 October 2022 (07:13 CET)Kuroda has previously defined excessive FX moves as two to three JPY per dayand we are so far well short of that level of volatility. Yesterday, JPY Czar and ViceFinance Minister for International Affairs Masato Kanda said he could intervene inthe air and on the way to Washington if needed, but there are few signs of that sofar. At the heart of the matter is whether or not the MoF will defend the 146 lineand so intervene soon or take a sniper approach to intervention and save its bulletsto tactically pick off investors that get long USD/JPY. We estimate the MoF hasabout USD120-130bn to use for intervention before it has to start selling USTs andso it has another five to six shots if they intervene at the USD2Obn rate it did on 22USD/JPY's short-term fair value to be 149.33; so where it should be in the absenceof BoJ intervention,GBP:growth,growth,growthintoquestionappetite swung quite wildly. The latest UK jobs report on balance looked solidalthough wages growth co