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By XE Market Analysis April 12, 2019 2:09 pm
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    XE Market Analysis: Asia - Apr 12, 2019

    The Dollar pulled back in N.Y. trade on Friday, weighed down by risk-on conditions, which came following improved China loan and trade data. The DXY fell to 96.75 lows from overnight highs of 97.19. Wall Street extended gains, while Treasury yields rose as well. EUR-USD rallied to near three-week highs of 1.1323, but slipped back under 1.1300 into the London close. USD-JPY was bid up on the better risk-taking levels, topping at 112.03. USD-CAD steadied around 1.3325 after falling from 1.2275 in London on firmer oil prices. Cable topped at 1.3132, later heading back under 1.3080.

    [EUR, USD]
    EUR-USD printed nearly three-week highs of 1.1323, with gains coming largely on the back of Dollar weakness following improved China trade and loan data. A reduction in USD safe-haven flows supported the pairing. Stronger Eurozone The Euro later pulled back under 1.1295 into the London close on pre-weekend position squaring. Overnight, talk centered on Japan’s Mitsubishi UFJ Financial Group's purchase of aviation financing business of Germany’s DZ Bank as being behind the demand for Euros. EUR-JPY rose over 0.5% in making a three-week high at 126.33.

    [USD, JPY]
    USD-JPY printed better than one-month highs of 112.03. The pairing has been supported by the run-up in Treasury yields, along with generally risk-on conditions. As is usually the case when approaching round numbers, reports of Japanese exporter offers are rumored to be in place from the 112.00 level. Above there, the March 5 high of 112.13 is the next upside target level. Support now comes in at 111.50, representing the 200-day moving average. The Yen underperformed overnight, reported on EUR-JPY demand. Japan’s Mitsubishi UFJ Financial Group is purchasing the aviation financing business of Germany’s DZ Bank.

    [GBP, USD]
    Cable printed highs of the week at 1.3132 in N.Y. on Friday, heading higher largely on the back of a generally softer Dollar, before easing back under 1.3080. The extension of the Brexit process, with its October-31 deadline, has taken Brexit off the "of-immediate-concern" list with the UK having, for now, avoided a disorderly no-deal exit from the EU. The extra time will buy time for the public mood to have an impact on proceedings. Although the country remains divided on Brexit, a movement calling for another referendum on EU membership appears to be gaining ground. The nearer term focus will be on efforts by the government and Labour to find a comprise around the existing Withdrawal Agreement, which Labour want to be attached with a commitment for the UK to remain in the EU customs union in the post-Brexit future.

    [USD, CHF]
    EUR-CHF rallied to three-week highs of 1.1331, the move higher coming as EUR-USD topped over 1.1320. The rotation higher the past few sessions tracked gains in EUR-USD. SNB member Maechler said last 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. The EUR-CHF cross has been seeing choppy directional impulses since the start of the year, often times characterized by bouts of pronounced underperformance in the Swiss franc that have often been accompanied by talk/suspicions of SNB intervention.

    [USD, CAD]
    USD-CAD bottomed at 1.3314 early in the session, down from Asian highs of 1.3385. As usual, losses came on the back of oil price gains, though with WTI crude off its best levels over $64.50, USD-CAD has steadied above lows. Support remains at 1.3309-1.300, with resistance at 1.3395.

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