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By XE Market Analysis April 2, 2020 2:15 pm
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    XE Market Analysis: Asia - Apr 02, 2020

    The Dollar index rallied in N.Y. on Thursday, printing a one-week high of 100.27, after opening near 99.55. Safe-haven USD buying was likely following the huge 6.6 mln rise in weekly jobless claims, and later appeared to have got a boost from the as much as 30% rally in oil prices, which came following a Trump tweet saying Saudi and Russia would cut oil production. The news drove Wall Street higher as well. EUR-USD fell to seven-session lows of 1.0840 from highs over 1.0920, while USD-JPY bounced from just above 107.00 to print a high of near 108.10. USD-CAD was whipsawed by the claims data, then the spike in oil prices, ranging between 1.4299 and 1.4080. Friday brings the March employment report, which will begin to capture the virus related job losses. We expect a 100k drop in non-farm payrolls.

    [EUR, USD]
    EUR-USD retreated to 1.0837 lows, after finding sellers step in at 1.0900. The next downside target now is seen at the 1.0800 level. The turnaround in oil prices, which saw Wall Street turn higher appeared to have helped the USD generally, with USD-JPY higher, and Cable heading lower. The recent narrowing in the dollar's yield advantage over the Eurozone, driven by the Fed's aggressive monetary policies, looks to have based out for now. Given the uncertainty surrounding the pandemic, we expect the USD to retain some of its safe-haven qualities, leading to a lower EUR-USD in the coming sessions.

    [USD, JPY]
    USD-JPY saw some buyers step in ahead of the 107.00 mark following the horrendous jobless claims outcome, basing at 107.02 before rallying over 107.35. Later, as Wall Street turned higher with oil prices, USD-JPY headed over 108.00 in late morning trade. Bigger picture, with no end in sight for the pandemic, global economies will likely continue to contract, which will likely keep equities on a downward path, which should continue to weigh on USD-JPY.

    [GBP, USD]
    Cable declined through the N.Y. morning session, falling from 1.2475 highs into the open, before bottoming at 1.2353. The pairing followed EUR-USD's path lower, though remains inside of its one-week trading band, having recovered from 35-year lows of near 1.1400 since March 20. The subsequent rally came as the Fed releases unlimited Dollar liquidity measures.

    [USD, CHF]
    EUR-CHF traded under the 1.0600 mark in N.Y. on Wednesday, as risk-off conditions prevailed. Safe haven demand for the CHF will likely continue on and off amid heightening concerns about the global economic disruptions being caused by efforts to contain the coronavirus.

    [USD, CAD]
    USD-CAD rallied after the U.S. and Canada trade reports, though it was likely the huge surge in U.S. jobless claims that weighed on the CAD. Slowing economic activity in the U.S. will result in slowing in Canada due to its high level of dependency on the U.S. market. USD-CAD topped over 1.4220, up from 1.4145 into the data. Later in the session, the huge rally in oil prices following Trump reports of a Saudi/Russia deal to cut production, saw USD-CAD dive back to 1.4082 lows.At one point, WTI crude was up over 30%, topping at $27.30.

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