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By XE Market Analysis April 17, 2015 3:11 pm
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    XE Market Analysis: Asia - Apr 17, 2015

    The dollar rallied early in the aftermath of warmer U.S. CPI data, though with corporate earnings under some pressure this quarter, renewed Greece concerns, lower yields, and a subsequent Wall Street sell-off, the greenback soon moved generally lower again. EUR-USD fell from session highs of 1.0844 after the data, falling to a low of 1.0733 before heading higher again. USD-JPY managed 119.26 highs, though gave back the 119 handle into the London close, before basing at 118. 82. USD-CAD slid to new three month lows of 1.2188 following hotter Canadian CPI and retail sales number, before recovering over 1.2250 on short covering and softer oil prices. Cable meanwhile, ran out of steam into 1.5050, and later fell back to 1.4920 lows.

    [EUR, USD]
    EUR-USD fell to intra day lows of 1.0733, with accounts reportedly happy to square long positions over the 1.0800 level following the U.S. CPI data. Comments from Germany's Schaueble, who is not optimistic on a Greek deal at the Riga Eurogroup meeting next week hasn't helped the euro, nor has ECB's Weidmann words, who said a weaker EUR supports German exports. The pairing rallied back from there however, moving over 1.0790 before turning sideways into the close.

    [USD, JPY]
    USD-JPY rallied after the warmer U.S. CPI data, touching 119.26 highs before spending teh remainder of the session leaking to lows of 118.74. A messy risk backdrop, including sharply lower equities, and lower Treasury yields weighed on the pairing, taking it to a one month low. The March 25 base of 118.33 provides the next support region.

    [GBP, USD]
    Sterling traded higher against both the dollar and euro over the last day. Stronger than expected RICS house prices was the latest of a series of firm data, reaffirming the positive UK fundamental backdrop. Cable made its way to just shy of1.4970 in late N.Y. trade, after moving up through the morning on weaker U.S. data, and a stronger EUR-USD.

    [USD, CHF]
    EUR-CHF drifted to 10-week lows under 1.03, the lowest since January 29 despite the latest euro bounce versus the dollar. The SNB will probably be best advised to sit on its hands during the Greek crisis, although the SNB said at its March policy review that the franc is "significantly overvalued and should continue to weaken over time," and that it will continue to take account of the franc rate situation in policy decisions and "remain active in the foreign exchange market, as necessary."

    [USD, CAD]
    USD-CAD took another dive after the much hotter Canadian CPI outcome and better retail sales, falling to 1.2088 lows, levels last seen in mid-January. The pairing has now completely filled the January 21 daily chart "gap" up from 1.2063 to 1.2394, with support now coming in at 1.2063. Oil prices have offset marginally, as WTI traded into $56/bbl, from 2015 highs over $57.30 on Thursday. USD-CAD later rallied back above pre-CPI levels, peaking at 1.2250. Given the pairing's 3.5% drop from highs to lows this week, pre-weekend short covering should not come as a surprise. In addition, WTI crude is trading back down on the $55 handle, which has added some USD-CAD support as well.

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