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By XE Market Analysis April 22, 2019 2:21 pm
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    XE Market Analysis: Asia - Apr 22, 2019

    The Dollar index lost modest ground in very light trade in N.Y. on Monday. Europe remained on holiday for the Easter break, contributing to the sluggish session. The DXY slipped marginally to 97.27 from 96.36 early in the session. Incoming data was light, and featured March existing home sales, which were softer than expected. EUR-USD topped at 1.1262 from lows of 1.1257, while USD-JPY was sideways between 111.90 and 111.95. USD-CAD fell to 1.3343 lows on trend high oil prices. Cable printed one-month lows of 1.2975.

    [EUR, USD]
    EUR-USD printed two-session highs of 1.1262, up from overnight lows of 1.1236. Trade has been light through the N.Y. session, as most of Europe remains on Easter holiday. Today's modest Euro rally has been attributed to light short covering interest, following losses last week which came on weak EU PMI data, and strong U.S. retail sales, and near 50-year low jobless claims. The Dollar remains in favor overall, and EUR-USD can be expected to be sold into on modest upticks. 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 has been stuck inside of 111.75 and 112.20 for more than a week now, struggling over the 112.00 level reportedly due to ongoing Japanese exporter backed selling, while finding support from what have mostly been risk-on conditions of late. We look for further USD-JPY gains this 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 was rangebound through the N.Y. session, though with London on holiday Monday, liquidity was at a premium. The pairing meandered between 1.2990 and 1.2976, a marginally new one-month low, continuing to hold above its 200-day moving average, which is currently situated at 1.2967.

    [USD, CHF]
    EUR-CHF firmed to two-plus month highs of 1.1436 in N.Y. on Monday. 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 fell from overnight highs of 1.3390 to 1.3343 lows. The move was precipitated by the sharp rally in WTI crude prices, which came following reports that the U.S. would end sanction waivers on Iran exports. This was recently confirmed by U.S. Secretary of State Pompeo. Oil prices topped at six-month highs of $65.85.

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