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By XE Market Analysis April 14, 2014 2:59 pm
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    XE Market Analysis: Asia - Apr 14, 2014

    The dollar stayed firm against the euro in N.Y. trade on Monday, as the ECB talked down the euro overnight, saying further easing could come should the currency firm further. EUR-USD touched 1.3809 lows, before edging up over 1.3825. USD-JPY meanwhile, was again pushed back from the 102.00 level, and looks more and more vulnerable to the downside in the near term. Cable found support into 1.670 and bounced modestly, while USD-CAD tripped sell stops at 1.0950, though later bounced over 1.0960. Wall Street and yields rebounded some from last week's drubbing.

    [EUR, USD]
    The EUR gapped lower at the open in Asia Pacific before extending losses in Europe on remarks from ECB President Draghi, who over the weekend said that a firmer euro could prompt addition easing. EUR-USD based at 1.3815 in London, and managed modest losses to 1.3809 during N.Y. hours. Upside from there was limited to 1.3828, and the pairing settled into 1.3820 at the close.

    [USD, JPY]
    USD-JPY was again pushed back from the 102.00 level, easing back to 101.70 lows so far. Today marked the fourth consecutive session the pairing traded the 102 handle, without closing above the level. Traders remain in sell the rally mode, and more significant downside could be in the cards on a move under 101.30.

    [GBP, USD]
    Cable found a base just under 1.67 following the stronger U.S. retail sales data, slowly recovering back to 1.6743 after the London close. We expect this week's monthly batch of labour market data (Wednesday) to continue to paint a picture of robust economic recovery, which should offset our expectations for inflation data (Tuesday) to show another cycle low in headline CPI, to 1.6% y/y. This backdrop should keep sterling underpinned.

    [USD, CHF]
    EUR-CHF dipped to a one-month low of 1.2142, even though SNB's Jordan said that Swiss inflation remains "very low," and that the franc cap would still be defended. The situation in the Ukraine, and Russia's intentions, remain a concern, and this is a supportive factor for the CHF. More generally, over the last week Lower stock markets and weak China trade data have lifted the Swiss currency's safe haven premium. The cycle low of 1.2104 is a key support, while below 1.2100 the risk of SNB intervention would ratchet up.

    [USD, CAD]
    USD-CAD gave back post-U.S. retail sales gains, stalling at 1.0990, and easing back into 1.0965 initially. As was the case in Asia, solid offers into the 1.1000 level capped gains, and with risk appetite firmed up this morning, CAD buyers returned. The pairing later tripped stops at 1.0950, on its way to 1.0943 lows. Domestic names were reportedly on the bid into the lows, resulting in a move back over 1.0970. Firmer equities, gold and oil prices limited USD-CAD gains.

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