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By XE Market Analysis April 24, 2018 3:10 pm
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    XE Market Analysis: Asia - Apr 24, 2018

    The dollar had faded some from overnight highs at the N.Y. open on Tueday, spending much of the remainder of the session trending lower. The DXY topped at 91.07, a three-month high, during Asian hours, before touching 90.73 lows in N.Y. Wall Stree took a dive, despite generally strong earnings, with the tech sector pacing losses. The 10-year Treasury note touched the key 3.00%, also weighing on stocks. EUR-USD recovered from 1.2182 lows, topping at 1.2243, as USD-JPY fell from 109.20 highs to 108.71. USD-CAD was steady over 1.2800, while cable climber to 1.3987 highs.

    [EUR, USD]
    EUR-USD bounced from its lowest since March 1, topping at 1.2235 after printing 1.2182 lows in London morning trade. Sellers emerged overnight as Germany's Ifo report missed the mark, raising concerns over a general European growth slowdown. Since then, short covering was a driver, as the pairing approached the bottom of its near three-month trading floor.

    [USD, JPY]
    USD-JPY's gains continued through the morning, topping at 109.20 in N.Y. morning trade, to levels last seen on February 9. Firm Treasury yields, as opposed to Japan's near zero rate policy, gives the dollar a nearly 250 basis point (3-month) advantage. Higher equities in early trade, and easing geopolitical concerns were also drivers, though as Wall Street turned negative, USD-JPY headed back under 109.00.

    [GBP, USD]
    Cable clawed back some recent losses, topping at 1.3987, from lows of 1.3920 in London. Better than expected government borrowing data out of the UK helped sentiment, with the government having previously pledged to up spending should there been lower than expected deficit. The pair would need to close above 1.3942 to break a run of six consecutive down sessions. We anticipate Cable will trade steady-to-lower into the May BoE monetary policy decision, when the bank will also release its latest quarterly inflation report.

    [USD, CHF]
    EUR-CHF pulled back from the key 1.2000 level, bottoming at 1.1928. 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. 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 has steadied near the top of its recent range this morning, remaining inside of Monday's trading range, after posting four consecutive higher daily highs. The pairing sits at 1.2825, with gains limited as WTI crude maintains altitude over $69/bbl. Bigger picture, cooler Canada CPI, and lowered growth prospects, along with a cautious BoC should overall keep USD-CAD supported.

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