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By XE Market Analysis April 8, 2020 2:52 pm
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    XE Market Analysis: Asia - Apr 08, 2020

    The Dollar headed higher overnight, though gave back much if its modest gains through the N.Y. session on Wednesday. Major pairings were largely in consolidation mode ahead of the long Easter weekend, with many on holiday Friday and Monday. There was no incoming U.S. data, and focus remained on the pandemic. Wall Street and yields rose as indications that the worst phase of the virus may be over in the coming days. EUR-USD ranged between 1.0888 and 1.0851. USD-JPY opened at 1.0910 highs, before easing to 108.60. USD-CAD moved between just over 1.4070 and 1.3995. Cable outperformed, rallying to 1.2420 from opening lows under 1.2350.

    [EUR, USD]
    EUR-USD recovered from the overnight losses which came after EU finance ministers failed to agree on a EUR 500 bln pandemic rescue package. The pairing fell from near 1.0890 to 1.0830 during the London morning session. Since then, an increase in risk taking levels has seen Dollar demand fade, allowing EUR-USD to head back to highs near 1.0890. The pairing later steadied near 1.0850 in light afternoon trade. We look for further consolidation into the Easter weekend.

    [USD, JPY]
    USD-JPY fell to 108.60 from early highs of 109.10, since edging back over 108.80. The pairing remains below recent highs of 109.38 seen on Monday, though has continued to be supported above its 200-day moving average at 108.34. Risk-on conditions for now should limit downside as well. Japan's coronavirus emergency declaration on Tuesday had little impact on the Yen, which continues to be driven largely by risk taking levels.

    [GBP, USD]
    Cable headed from London lows of 1.2288 to a N.Y. high of 1.2420, reflecting both a broader turn lower in the dollar, which reversed course after rising in Asia and early London trading, and a broader turn higher in the pound. The dynamic has been concomitant with a paring of stock market losses in Europe and stock market gains in the U.S, with Sterling having become apt to correlative positively with risk appetite during the coronavirus crisis. PM Boris Johnson, who entered a third day in intensive care, hasn't rattled UK markets too much, with the Foreign Secretary Dominic Raab deputizing as prime minister, and who, while lacking Johnson's political capital, is expected to allow for leadership with the rest of the cabinet and senior advisors and civil servants.

    [USD, CHF]
    EUR-CHF was fairly steady under 1.0600 in N.Y. on Wednesday, 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 remained above Tuesday's 1.3945 low, opening the North American session near 1.4000, later rallying over 1.4065. Depressed oil prices put a floor under the pairing, with WTI crude off its lows, but down sharply from Tuesday. Risk-taking levels are for now at least, CAD positive though, with offsetting factors seeing USD-CAD in consolidation mode. Support is at 1.3945, with resistance at 1.4145.

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