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By XE Market Analysis April 15, 2020 3:29 pm
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    XE Market Analysis: Asia - Apr 15, 2020

    The Dollar rallied in early N.Y. trade on Wednesday, as global risk-off conditions prevailed. Safe-haven USD buying dominated early, as stocks plummeted, oil prices crashed under $20/bbl, and earnings reports missed expectations, not to mention the ongoing pandemic uncertainties. The USD later turned lower as U.S. retail sales fell the most ever, and industrial production plummeted the most since WWII. Wall Street traded sharply lower, paring some losses in afternoon trade, while Treasury yields headed lower as well. EUR-USD fell from near 1.0940 into the open to 1.0856, later heading back over 1.0930. USD-JPY rallied from under 107.30 to 107.86, falling back to 107.25 after the London close. USD-CAD rallied sharply overnight on collapsing oil prices, topping at 1.4132, later easing to 1.4053 lows. GBP-USD fell through the London morning session, bottoming at 1.2437 in early N.Y., then heading back over 1.2570.

    [EUR, USD]
    EUR-USD eased to one-week lows of 1.0856 in early N.Y. trade, initially ignoring the horrible U.S. retail sales and production data. The pairing fell from pre-opening highs of 1.0930, with losses coming on the back of safe-haven USD buying, as oil crashed under $20, earnings misses, and stock futures cratered. The Euro later bounced back to 1.0930 as markets steadied to a degree. EUR-USD support is at last Thursday's 1.0841 low, with resistance at the 50-day moving average at 1.0964.

    [USD, JPY]
    USD-JPY rallied from two-week lows of 106.93 seen during Asian hours, peaking at 107.86 in N.Y. morning trade. The IMF's overnight report, which downgraded global growth more than expected, along with the record downturn in U.S. retail sales, and the huge drop in U.S. industrial production, all combined to see a rush into the safe-haven USD. From the top, USD-JPY pulled back under 107.35, as panic conditions abated some. Wall Street has remained down over 2% on the session, though has so far, not turned into meltdown mode, allowing the pairing to ease some. Bigger picture, USD-JPY remains inside of ranges seen over the past two-weeks.

    [GBP, USD]
    Cable fell to 1.2437 lows in early N.Y. on a round of safe-haven Dollar buying, coming down sharply from early Asian highs of 1.2630. Following ugly U.S. retail sales and production data, the pairing headed back toward 1.2570 after the London close. On the coronavirus front, a U.K. government spokesman said details on the formal decision to extend the lock down another three weeks, to May 7th, will be covered at the daily government press conference on Thursday.

    [USD, CHF]
    EUR-CHF headed to fresh five-year lows of 1.0524 in N.Y. on Wednesday, as another sharp round of risk-off hit the cross. Safe haven demand for the CHF will likely continue on and off depending on the daily the level of concern about the global human and economic disruptions being caused by efforts to contain the coronavirus.

    [USD, CAD]
    USD-CAD made its way to seven-session highs of 1.4120 from overnight lows of 1.3877 in early trade. The collapse in oil prices was the driver, as WTI crude hit $19.21, levels last seen in February of 2002. The IEA overnight estimated oil demand has fallen 29 mln bpd in April, to levels last seen in 1995. USD-CAD had been on the decline for the past week as USD demand had faded following the Fed's huge stimulus, though the oil price selloff overrode that for now. USD-CAD later dipped to near 1.4070 from 1.4080, then topped at 1.4132 after the BoC announcement, where rates were left unchanged. The BoC reconfirmed its QE stance, with the statement saying "under its previously-announced program, the Bank will continue to purchase at least $5 billion in Government of Canada securities per week in the secondary market, and will increase the level of purchases as required to maintain proper functioning of the government bond market. Also, the Bank is temporarily increasing the amount of Treasury Bills it acquires at auctions to up to 40 percent, effective immediately." From here, the CAD will likely continue to react to oil price developments.

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