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By XE Market Analysis April 5, 2019 2:00 pm
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    XE Market Analysis: Asia - Apr 05, 2019

    The Dollar index bounced to near highs of the week after the March U.S. jobs report, which was a bit mixed, with NFP printing higher than expected, though earnings missed the mark. The DXY rallied from 97.28 lows to 97.46. Wall Street rallied modestly, as U.S.-China trade negotiation are set to continue through the weekend. EUR-USD dipped from 1.1245 to lows of 1.1210, as USD-JPY printed three week highs of 111.82. USD-CAD chopped inside of familiar ranges following a softish Canada jobs report, under 1.3400. Cable meanwhile, bottomed under 1.3000 as Brexit related position squaring set in into the weekend.

    [EUR, USD]
    EUR-USD was a bit choppy after the jobs report, initially rising to 1.1245 from 1.1230, then quickly falling back to 1.1217 lows. The jobs report was a bit mixed, with softer earnings and participation rate outcomes, offsetting the firmer NFP print. The pairing steadied on either side of 1.1230, then fell to session lows of 1.1210 into the London close. Sell-the-rally remains in place for EUR-USD, and we expect the March 7 low of 1.1177 will be tested at some point, as the U.S. economy continues to outperform its EU rival.

    [USD, JPY]
    USD-JPY printed three-week highs of 111.82 in the aftermath of the U.S. jobs report, adding to its impressive streak of nine-straight sessions of higher daily highs. The 200-day moving average at 111.48 has been cleared decisively on Friday, after flirting on either side of it through the week. Firmer yields this week were supportive, as well as the generally positive risk backdrop. The March 15 high of 111.90 is the next upside target, a break above which would take the pairing to 2019 highs.

    [GBP, USD]
    Cable fell to one-month lows of 1.2987 into the London close on Friday, with traders likely squaring up long positions, or adding to shorts going into the weekend, where the fluidity of Brexit talks could mean anything can happen this weekend. It is unclear how much of an extension the U.K. will get from the EU, and there is little reason to believe Westminster will be able to legislate themselves onto a clear path forward.

    [USD, CHF]
    EUR-CHF gained for a fifth consecutive day in reading a nine-day high at 1.1239, extending the rebound from the eight-month low seen last week at 1.1162, before easing to 1.1215 low, as EUR-USD lost steam following the U.S. jobs report. The rotation high has reflected broader Euro gains, which have bee aided by some above-forecast economic data out of the Eurozone, and increased odds for the UK to be heading to a "soft" version of Brexit. SNB member Maechler said this week that while the Swiss economy remains dynamic and the global economy should remain solid, inflation pressures remain very weak and the environment is fragile, which continues to warrant expansionary monetary policy.

    [USD, CAD]
    USD-CAD initially fell to 1.3355 from 1.3380 after the twin jobs reports, though quickly spiked briefly over the 1.3400 mark from there. The U.S. data was mixed, while the Canadian report, was about in line with consensus forecast. Since then, the pairing has returned to near 1.3380 again, about unchanged on the session. Oil prices have moved higher on the back of the data, which should limit USD-CAD gains going forward.

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