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By XE Market Analysis April 16, 2020 2:30 pm
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    XE Market Analysis: Asia - Apr 16, 2020

    The Dollar index rose over the 100 mark for the first time in a week, topping at 100.29 in afternoon trade. Dismal incoming U.S. data kept the safe-haven USD bid through much of the session. Jobless claims were up another 5+ mln. March Housing starts and the April Philly Fed index were sharply lower as well. Wall Street was mixed, with 6% losses for Boeing weighing on the Dow. The S&P 500 was nearly flat, while the NASDAQ outperformed. Treasury yields were a bit lower. On the virus front, New York and California extended their lock downs through mid-May from the end of April. EUR-USD fell from 1.0901 highs to 1.0817. USD-JPY initially fell from 107.0 to 107.17, later rallying back over 107.80 as Wall Street pared early losses. USD-CAD rallied from 1.4065 to near two-week highs of 1.4182, as oil prices headed back under $20/bbl. Cable fell from 1.2515 to under 1.2410.

    [EUR, USD]
    EUR-USD has been sideways between 1.0900 and 1.0864 since the N.Y. open, earlier pushing under the 20-day moving average at 1.0903 during the Asia session. Today's intra day range has been about half of Wednesday's, which can be put down to a calmer risk backdrop, and some consolidation going into the end of the week. 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 peaked at four-session highs of 108.08 in Asian trade, before turning to a slow but steady pullback, to 107.42 lows in early N.Y. trade, subsequently recovering to 107.82, as Stocks pared losses. The pairing has been unable to close over its 200-day moving average at 108.32 so far this week, indeed only trading above the level on Monday. The safe-haven Yen is liable to remain in buy-the dip mode through the coronavirus pandemic, as the opening up of global economies will take months, if not more to achieve. There are bound to be many more risk-off periods to come. A USD-JPY move under 106.90, lows that have held since the start of the month, should result in follow through selling.

    [GBP, USD]
    GBP-USD traded to 1.2515 highs in early N.Y., though took a fall in late morning, following a U.K. spokesman said that pandemic has strengthened the need or the UK to be free of EU regulation after 2020, emphasizing that there will not be any extension to the post-Brexit transition, which expires at the end of the year and which maintains UK membership of the EU's customs union and single market (but without voting rights), even if requested by the EU. The pound didn't like the talk of no extension, which saw Cable retreat under 1.2410.

    [USD, CHF]
    EUR-CHF posted a low at 1.0509 in N.Y. trade on Thursday, the fourth down day in a row, bringing the March 9 five-year low into view. Assuming the coronavirus crisis persists, as looks highly likely, this should maintain Swiss franc's safe haven premium, which should keep EUR-CHF directionally biased to the downside.

    [USD, CAD]
    USD-CAD posted a near two-week high at 1.4137 during Asian hours, later bottoming at 1.4088, before settling on either side of 1.4100. The pairing ramped higher through the Tuesday/Wednesday session as oil prices fell to 18-year lows near $19.20. WTI crude steadied above lows in morning trade, which temporarily removed the urgency to sell the CAD, though later the crude contract eased back under the key $20/bbl level. This saw USD-CAD move to fresh highs over 1.4180 in afternoon trade.

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