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By XE Market Analysis April 8, 2014 3:23 pm
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    XE Market Analysis: Asia - Apr 08, 2014

    The dollar faded further in N.Y. trade on Tuesday, resulting in EUR-USD moving over 1.3800, and USD-JPY under 102.00. There was no data to drive the FX market, though general risk aversion, and geopolitical concerns kept traders cautious. The BoJ's lack of future guidance on potential easing measures supported the yen broadly, while in Europe, ECB speak from Monday reverberated. Recall, the ECB's Mersch and Nowotny dampened market expectations with regard to QE. Wall Street stemmed its recent bleeding, though posted only minor gains, while Treasury yields were little changed.

    [EUR, USD]
    EUR-USD peaked at 1.3808 early in the session, before edging back to 1.3788 lows. The pairing moved back over the figure, though struggled to move higher, managing just a 1.3811 peak. Real money offers were reported over the figure, along with decent option backed selling. The pairing settled into a narrow afternoon range on either side of the figure.

    [USD, JPY]
    USD-JPY gave up the 102 handle, trading to 101.90 lows. The BoJ's lack of action was expected overnight, though some were looking for hints on the Bank's next phase of stimulus. BoJ's Kuroda however, was mum on the subject, which led to a fairly robust USD-JPY sell-off. We look for more easing action in July though, after impact from the new Japan sales tax becomes more clear.

    [GBP, USD]
    Sterling rallied on production data out of the U.K., which smashed expectations and should lead to upward tweaks in GDP forecasts for Q1. Cable ramped up to 1.6725 highs into the N.Y. open, and from there, given the overall soft USD backdrop, climbed to 1.6755.

    [USD, CHF]
    EUR-CHF has settled lower after making a two-month high of 1.2249 on Friday. The up move reflects an unwinding of the Swiss franc's safe-haven premium. The cycle low of 1.2104 was left unchallenged during the recent risk-off phase. We see potential for a recovery to the 1.2300-1.2400 area, but this assumes there are no renewed flare-ups in geopolitical tensions.

    [USD, CAD]
    USD-CAD touched 1.0913 lows, with CAD gains coming on the back of the Liberal party majority victory in Quebec. The separatist Parti Quebecois lost its bid for a majority, which would have resulted in a referendum on Quebec breaking up with Canada. With that now out of the way, the CAD has benefited, though USD-CAD bids are said to be thick into 1.0900. The usual corporate interest has been reported. Stops will be a factor under the figure.

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