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By XE Market Analysis April 7, 2020 3:21 pm
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    XE Market Analysis: Asia - Apr 07, 2020

    The Dollar headed mostly lower in N.Y. on Tuesday, after nearly a week of gains. Risk-on conditions prevailed, as the pandemic appears to be flattening out in some places. Wall Street took that as a positive, and rallied through much of the session, though a slide in oil prices due to the EIA cutting 2020 price forecasts saw stocks pare gains late in the session. EUR-USD made its way to 1.0926 from opening lows of 1.0860, while USD-JPY faded to 108.77 lows. USD-CAD ranged between 1.4026 and 1.3946, while Cable topped at 1.2344, before briefly dipping under 1.2300.

    [EUR, USD]
    EUR-USD posted its first up day in a week in N.Y. trade, marking a 1.0926 top, and up from 1.0860 at the open, and 1.0784 after the close on Monday. Another session of risk-on, coupled with aggressive Fed Dollar liquidity efforts has seen the USD head lower. The 1.0950 then 1.0980 levels mark resistance, representing the 20- and 50-day moving averages, with support coming in at Monday's low of 1.0768.

    [USD, JPY]
    USD-JPY put in an "inside day" remaining inside of Monday's trading range, finding support under its 50-day moving average, currently at 108.76. Dollar-Yen has pulled back from N.Y. highs of 109.08, taking its cue from the paring of still significant Wall Street gains. Further upside can be expected if COVID-19 news remains on a positive trend, with infection curves in many places appearing to be entering a flattening phase.

    [GBP, USD]
    Cable printed a high of 1.2384, extending the rebound from yesterday's low at 1.2213, later falling back to 1.2294 lows into the London close. The pairing turned sideways on either side of 1.2340 through the remainder of the N.Y. session. The actions of the Fed and other central banks to satiate the demand for cash has steadied the GBP to a degree. Markets narratives have also been promoting the view that the UK will ask the EU for an extension of its post-Brexit transition membership of the Union's customs union and single market, which would also be supportive of Sterling.

    [USD, CHF]
    EUR-CHF was fairly steady under 1.0600 in N.Y. on Monday, as risk appetite returned on hopeful virus signs. Safe haven demand for the CHF will likely continue on and off depending on the daily the level of concern about the global economic disruptions being caused by efforts to contain the coronavirus.

    [USD, CAD]
    USD-CAD traded to eight-session lows of 1.3945, down from an overnight high of 1.4143. Today's risk-on backdrop, along with reports that Russia will participate in Thursday's OPEC+ teleconference meeting supported the CAD through the morning. An output cut accord is reportedly being negotiated between Saudi Arabia Russia, though an agreement remains to be seen. Later, USD-CAD rallied to 1.4028 highs on the back of a dismal Ivey PMI outcome, and another sell-off in oil, as the EIA slashed U.S. WTI price forecasts.

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