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By XE Market Analysis April 18, 2019 2:17 pm
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    XE Market Analysis: Asia - Apr 18, 2019

    The Dollar firmed in N.Y. trade on Thursday, taking the DXY to two-week highs of 97.48. Strong retail sales and trend low jobless claims supported the Greenback, following weaker EU PMI figures ahead of the open, which weighed on the Euro. EUR-USD touched 1.1227 lows, levels last seen on April 8. USD-JPY was supported by risk-on conditions, though continued to struggle over the 112 mark. USD-CAD meandered between 1.3365 and 1.3399, while Cable edged under 1.2980.

    [EUR, USD]
    EUR-USD printed seven-session lows of 1.1227, heading under its 20-day moving average for the first time since Monday. Selling interest picked up in earnest during the London morning session, as preliminary EU PMIs disappointed, leaving the manufacturing sector in recession. Since then, Dollar bulls have remained in charge, with solid U.S. retail sales and jobless claims keep pressure on EUR-USD. The April low of 1.1184, then the March 7 bottom of 1.1177 will be in the cross hairs in the coming sessions, with a break below there taking the pairing to levels last seen in June of 2017.

    [USD, JPY]
    USD-JPY popped to 112.02 from near 111.85 after the solid early U.S. data, though as has been the case all week, the 112.00 level gave way quickly. The pairing later pulled back to 111.85, though buyers stepped in as Wall Street gains picked up, with general improvement in risk-taking levels weighing on the Yen. We look for further USD-JPY gains next week ahead of the BoJ meeting. The BoJ ends its two-day meeting on Thursday, with no changes to its ultra-loose policy expected. The Bank will also release updated economic forecasts, which, according to a Reuters report, will downgrade conditions for the remainder of 2019, and will forecast 2021 CPI at 1.5%, still under its decade-long, and still not achieved 2% target.

    [GBP, USD]
    Cable recouped to around 1.3020 after printing a fresh two-week low at 1.2992 early in the N.Y. session, dragged lower by losses in EUR-USD following sub-forecast preliminary PMI data out of the Eurozone, then later by solid U.S. data. The pairing later touched 1.2979 lows after the London close. Much stronger than expected UK retail sales had only short-lived impact on sterling, with BoE data showing a sharp spike in the credit card default rate among the signs that all-is-not-so well in the UK economy. Recent range lows in Cable are contained within 1.2960 and 1.2987, which mark out a reference support zone.

    [USD, CHF]
    EUR-CHF chopped inside of Wednesday's trading bank in N.Y. on Thursday. The cross has traded higher on each trading day bar two since March 29, raising some suspicion of tactical SNB intervention. 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. .

    [USD, CAD]
    USD-CAD dipped to 1.3373 from near 1.3395 following the better Canada retail sales, though quickly ran up to 1.3399 highs, in reaction to the stronger U.S. retail sales figures, and near 50-year low jobless claims outcome. Since then, the pairing has eased back to 1.3365 lows, though has found some buyers again as WTI crude prices slip under $63.60. Position squaring will step in now, ahead of the Good Friday holiday.

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