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By XE Market Analysis April 19, 2018 3:05 pm
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    XE Market Analysis: Asia - Apr 19, 2018

    The dollar bounced in N.Y. trade on Thursday, taking the DXY to 89.91, a one-week high, and through its 20- and 50-day moving averages of 89.80, and 89.83, respectively. In-line jobless claims and leading indicators, along with a better Philly Fed outcome had little impact, though a late day cable sell-off following dovish Carney comments resulted in the biggest move of the day. EUR-USD bottomed at one-week lows og 1.2329, as USD-JPY largely treaded water in the lowe 107s. Cable slid to 10482 from opening highs 1.4240 USD-CAD meanwhile slipped on higher oil prices, before topping at 1.2671 as crude retraced lower.

    [EUR, USD]
    EUR-USD did a repeat performance of Wednesday's price action, in failing to trade above 1.2400, then selling off into the London close. The pairing bottomed at 1.2329, a one-week low, before buyers stepped back in. Short covering was noted just under the 20-, and 50-day moving averages at 1.2333, and 1.2331, respectively.

    [USD, JPY]
    USD-JPY was steady between 107.31 and 107.47 , with the late morning minor rally running out of steam into the London close. The pairing was sold to session lows of 107.25, before recovering to near 107.40. Sideways price action has been the rule for over a week now, perhaps as traders await the other shoe to drop on the geopolitical front, or on the Japanese political front, amid Abe scandals.

    [GBP, USD]
    The pound tanked on Carney comments from a BBC interview, where he said the timing of rate hikes has not yet been decided. He said a rise is "likely" this year. Most had been looking for a May hike, though this interview calls that into question. Cable slid to 1.4093 from 1.4190, while EUR-GBP ran up to 0.8770 highs from 0.8690 at the London close, and to near three-week highs.

    [USD, CHF]
    EUR-CHF has symbolically posted a high above 1.2000 -- symbolic as this is the first time the cross has traded above the SNB's former trading floor (or franc cap), which it abandoned in January 2015 in the face of broad and unstoppable euro depreciation caused by ECB monetary stimulus. This is the fourth consecutive week, and the sixth out of the last eight weeks EUR-CHF has rallied, and the cross is now over 12.5% higher from the levels of mid last year. USD-CHF has concurrently ascended into three-month high terrain. The franc has been driven lower by the -0.75% Swiss deposit rate along with the widespread expectation for the SNB to remain strongly committed to negative interest rates until after the ECB starts tightening. The central bank's chairman, Jordan, said in an interview with the La Liberte newspaper this week that "it is not yet time to change monetary policy," adding that "we do not want to provoke an appreciation of the Swiss franc."

    [USD, CAD]
    USD-CAD fell back to 1.2586 lows earlier in the North American session, following its spike to seven-session highs of 1.2659 seen in the aftermath of the BoC policy announcement on Wednesday. The surge in oil prices was supportive of the CAD, as WTI crude traded to 40-month highs of $69.56 early. The pairing later topped 1.2671 as oil prices shed nearly $1.50. Trade issues remain a CAD driver however, and with no clear NAFTA outcome currently seen, CAD gains may be limited.

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