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By XE Market Analysis April 1, 2015 2:49 pm
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    XE Market Analysis: Asia - Apr 01, 2015

    The dollar tilted lower in N.Y. on Wednesday, as data misses weighed on the dollar, yields, and Wall Street. The ADP employment survey was light of expectations, as was the March manufacturing ISM, and construction spending. EUR-USD opened near 1.0840, and made its way to session highs of 1.0795 into the London close. USD-JPY meanwhile, slipped from over 120.20 to a base of 119.43. Resurgent oil prices, following an apparent halt in Iran nuclear negotiations saw oil prices rally sharply, which in turn pushed USD-CAD under 1.2600, and AUD-USD over 0.7640. Trade will likely slow on Thursday, as Good Friday holidays will be ahead for many markets, while in the U.S., Friday's employment report should keep traders largely sidelined.

    [EUR, USD]
    EUR-USD headed higher after the softer ADP, ISM and construction spending data. The Markit ISM print revealed a better reading, though with Wall Street in the tank again, the greenback had been on the decline into the official ISM outcome. EUR-USD rallied to 1.0799 highs from 1.0740 at the open. The 10-year Tsy/Bund spread narrowed to -169 bp even as the Bund hit a low of 0.152% and the T-note matched March lows of 1.852%, also weighing on the dollar.

    [USD, JPY]
    USD-JPY recovered the 120.00 handle during the European AM session after dipping to a 119.42 low in Tokyo. Big option expiries with 120.00 strikes were also said to be expiring at the New York cut, which along with softer U.S. data, and a weak Wall Street, put some weight on the pairing. USD-JPY dove through 120.00 after the ADP jobs report, and eventually matched Tokyo's 119.42 low before bouncing over 119.65.

    [GBP, USD]
    Cable has steadied in the upper 1.47s, low 1.48s. The dollar majors have a pre-U.S. jobs report lockdown feel. EUR-GBP, meanwhile, has been holding a narrow range around 0.7270. Cable earlier dove to a 12-day low at 1.4739 on the back of a broader dollar bid, which overcame a brief sterling rally following above-forecast manufacturing PMI data out of the UK. Good UK data isn't having much market impact, however, due to concerns of a hung parliament outcome at the May-7 general election, especially as the SNP (Scottish Nationalist Party) may end up holding the balance of power.

    [USD, CHF]
    EUR-CHF has established a lower trading range under 1.0500. There have been some analyst notes in circulation highlighting further policy options the SNB has available to try and keep a lid on the franc (including cutting rates deeper into negative territory). The SNB said at its March policy review that the franc is "significantly overvalued and should continue to weaken over time," and that, in a shot across the bows of the market, said it will continue to take account of the franc rate situation in policy decisions and "remain active in the foreign exchange market, as necessary."

    [USD, CAD]
    USD-CAD moved to session lows of 1.2631, as the greenback softened overall, and as oil prices moved back to the top of their intra day ranges, near $48. The next support area came in at 1.2600, which represented the 20-day moving average, though USD-CAD moved through the figure, touching lows of 1.2577, as WTI crude cleared the $50 level. Sell stops were reported under 1.2595, though the pairing reclaimed the 1.26 handle as oil closed under $50.

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