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By XE Market Analysis April 28, 2014 1:44 pm
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    XE Market Analysis: Asia - Apr 28, 2014

    Range trade was again the rule in N.Y. trade on Monday, with narrow and familiar bands in play for most of the major dollar pairings. EUR-USD managed to post two-week highs near 1.3880 in London, though was stuck inside of 1.3874-40 through the session. USD-JPY was buoyed by a better Wall Street performance early on, though as stocks faded, so did USD-JPY. That pairing move briefly over 102.60 from lows near 102.20. USD-CAD was sideways at 1.1020-40, while cable eased back toward 1.6800 from 1.6850. On the data front, pending home sales beat expectations, while the Dallas Fed index improved, though neither had much market impact. Wall Street started strong, on M&A news, though eventually turned mixed, while Treasury yields were marginally higher.

    [EUR, USD]
    EUR-USD was inside a 1.3840-74 range since the N.Y. open, with traders reporting light activity overall. Ongoing talking down of the euro by ECB officials (latest being Noyer earlier in the session) has had little impact, based on EUR-USD posting two-week highs today, while uncertainty in the Ukraine, has done nothing to temper the pairing's gains. Dollar weakness may have something to do with the euro being up in the rafters, coming into a FOMC meeting, where doves abound.

    [USD, JPY]
    USD-JPY was helped by the fairly strong Wall Street rally through the morning, with the pairing touching 102.62 highs, up from opening levels around 102.30. Standing offers are now seen at 102.70-80, and given the proximity of the BoJ meeting, we suspect the market will largely be content to maintain USD-JPY's recent trading band of 102.00-70. Indeed, after equities faltered, the pairing slipped back to 102.45.

    [GBP, USD]
    GBP higher on M&A news, with Pfizer of the U.S. said to be nearing a deal to buy the U.K.'s AstraZeneca. After peaking near 1.6860 in early N.Y. trade, cable succumbed to profit taking pressures, and headed back into 1.6800. Sterling continues to have not much staying power over the 1.68 mark.

    [USD, CHF]
    EUR-CHF has settled around 1.2200 again, having recovered from the one-month low of 1.2142 that was earlier in the month. The cycle low of 1.2104 and 1.2100 are considered key support levels. While situation in the Ukraine remains a concern, and a potential supportive factor for the CHF, the threat of SNB intervention into its 1.2000 limit peg is helping to deter franc buying. SNB's Jordan repeated last Friday that the central bank remains committed to defending the currency cap.

    [USD, CAD]
    USD-CAD continued to be mired in a 1.1000-60 range, today marking the sixth consecutive session inside the band. Events later in the week may push the pairing out of its quiet zone however, with the FOMC and perhaps more importantly, the BoJ meeting on tap, along with EU inflation, and U.S. employment data. In the meantime, bids remain at 1.1000-10, with offers parked at 1.1050-60. The pairing ultimately managed a 1.1018 to 1.1039 range.

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