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By XE Market Analysis April 4, 2014 4:19 pm
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    XE Market Analysis: Asia - Apr 04, 2014

    The dollar jerked higher then lower following the in-line U.S. jobs report, and settled slightly firmer versus the euro, and sharply lower against the yen. Wall Street and yields held up early on, though Wall Street took a dive after the S&P 500 and DJIA made new all time highs. USD-JPY was weighed down by the sharp downturn in risk appetite, and the softer Treasury yields that resulted. EUR-USD posted 1.3731 highs after the data, and later 1.3673 lows, before settling in on either side of 1.3700. USD-CAD meanwhile, finally took out the 1.10 mark following better Canadian employment data.

    [EUR, USD]
    EUR-USD ramped up to 1.3719, only to dive back to session lows of 1.3683, then recovering to 1.3731 in the immediate aftermath of the jobs data. Later, the pairing was slightly under pre-jobs data levels, trading just under 1.3700. With better prospects for ECB QE following Thursday's policy meeting, the euro will likely remain in sell-the-rally mode. Initial EUR-USD support is seen at 1.3660-40, with a break there likely to target 1.3580.

    [USD, JPY]
    USD-JPY moved to 104.10, then 103.55, and back to 104.13 after the U.S. jobs report, and maintained a narrow range until Wall Street turned from record highs to sharp losses. USD-JPY fell to near 103.20, as Wall Street losses continued to mount, led by the NASDAQ, which was down nearly 2.0% on the day, and as yields slipped back. Bids are reportedly layered from 103.30 to 103.00 now, so losses may be contained from here.

    [GBP, USD]
    Sterling lost some of its shine this week as all three of the Markit PMI surveys for March unexpectedly declined. The data still points to healthy expansion, though at a moderated rate. We remain moderately bullish about sterling against selected currencies, such as the yen, but we think Cable is in for a period of stability. Cable ranged between 1.6550 and 1.660 on Friday.

    [USD, CHF]
    EUR-CHF posted six-week highs of 1.2249, in N.Y. on Friday, with the spike up coming after the U.S. jobs report. As risk appetite faded, and Wall Street went into the tank however, the cross eased back to 1.2220. The ECB weighed heavily on EUR-USD over the previous 24 hours, as it moved closer to QE, and this should keep EUR-CHF buoyant for now.

    [USD, CAD]
    USD-CAD was finally able to break the key 1.1000 level following the better Canadian and about in-line U.S. employment reports. USD-CAD had found solid support into the 1.1000 mark all week, though has touched 1.0957 lows following the data. Initial support is seen at 1.0955 (March 6 low), followed by the February 19 base of 1.0911. The pariing held support, and got a lift from the softer Ivey PMI data, taking the pairing back over 1.0990. Buy-stops are seen at 1.1010 now, with a break there likely to see 1.1040 targeted.

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