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By XE Market Analysis April 9, 2014 3:24 pm
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    XE Market Analysis: Asia - Apr 09, 2014

    The dollar remained under pressure in N.Y. on Wednesday, with EUR-USD spending a good bit of time over the 1.3800 level. USD-JPY slipped to 101.75, though avoided stops reported under the overnight low of 101.55. There was little data to guide markets, though the FOMC minutes later took the dollar to new session lows, as the Fed jettisoned its jobless target, and sounded more dovish overall. EUR-USD spiked up to 1.3847 highs, while USD-JPY made new session lows of 101.73, after reclaiming the 102 handle earlier. USD-CAD was on three month lows under 1.0865.

    [EUR, USD]
    EUR-USD continued to struggle over 1.3800 through the morning session, trading on either side of 1.3800 through the morning. Recent ECB comments have taken the wind out of QE hopefuls, and should put a floor under the pairing for the time being. The euro jumped to 1.3847 highs after the FOMC minutes, and remained bid into the close. The ECB will take stronger EUR into account, according to ECB's Bonnici, who told the WSJ that a stronger EUR "has negative impact on the economy, which is not desirable". He added that a negative deposit rate remains a "possibility" and that the ECB is prepared for it. These comments came into the London close, and had no impact on the euro.

    [USD, JPY]
    USD-JPY eased into 101.75, after failing to take out London highs of 102.16. The pairing later bounced back over 102.00, before plunging to 101.73 after the Fed minutes. Fears that the BoJ will not be forthcoming with additional easing measures has supported the yen, though we suspect it is too soon to tell what the impact of the new sales tax in Japan will have on the economy. Consensus still calls for a July move by the BoJ, though in the meantime, some stale yen shorts may need to be washed out. USD-JPY sell-stops are noted at 101.50, just under the overnight lows.

    [GBP, USD]
    GBP-USD logged a fresh one-month high of 1.6765 in early trade. Sterling has been firming against other currencies too as the market has turned more bullish after yesterday's U.K. February production data smashed expectations. Credit Agricole, for instance, is now targeting Cable to 1.7050. Recent highs between 1.6788 and 1.6822 is a key resistance zone. Cable later spiked up to 1.6800 following the more dovish FOMC minutes.

    [USD, CHF]
    Swiss March CPI came in at 0.0% y/y, a tad up on the market median for -0.1% y/y. CPI has been hovering around 0.0% for some months, and this will ensure that the SNB maintains the currency limit peg and loose monetary policy settings. EUR-CHF softened into the N.Y. open, though found support into 1.2170, bouncing over 1.2185 in afternoon trade.

    [USD, CAD]
    USD-CAD touched 1.0912 lows in late Asian trade, and edged up over 1.0940 in London. The pairing remained inside of 1.0920-40 through mid morning, though headed lower into the London close. Stops at 1.0900 were run on the break of 1.0910, and later, following the FOMC minutes, USD-CAD headed under 1.0854, a three month low.

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