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By XE Market Analysis April 28, 2015 3:25 pm
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    XE Market Analysis: Asia - Apr 28, 2015

    The dollar fell early in N.Y. trade on Tuesday, as more weak U.S. data drove the point home ahead of Wednesday's FOMC announcement, that the Fed may well be on hold through the remainder of the year. Consumer confidence took a hit in April, largely due to the rebound in gasoline prices, and a messy geopolitical backdrop. The markets will still need to contend with Q1 GDP data on Wednesday ahead of the Fed, where forecasts have been downgraded over the past several weeks. EUR-USD bounced to 1.0990 highs, from lows near 1.0920, as USD-JPY settled in under the 119.00 level. USD-CAD fell to fresh three-month lows of 1.2015, as cable topped out at trend highs of 1.5335.

    [EUR, USD]
    EUR-USD approached the April 7 high of 1.0954 early in the session, peaking at 1.0952 before pulling back slightly. Ahead of the FOMC announcement on Wednesday, the dollar remained pressured, particularly against the European majors. EUR-USD buy stops at 1.0960 were later triggered, following weak consumer confidence data. The pairing made its way over 1.0990 in subsequent dealings, as the market geared up for what will likely be a dovish sounding FOMC statement.

    [USD, JPY]
    USD-JPY sold off to match Monday's low of 118.78, and has since recovered to the 118.90 region. The weak U.S. confidence data earlier, and prospects for a disappointing GDP outcome tomorrow, should keep the dollar on the back foot, as the market moves Fed rate lift-off to the distant horizon. USD-JPY support is seen into the 118.50 region.

    [GBP, USD]
    Cable rebounded strongly in London after diving on disappointing UK GDP data. Cable lost almost 50 pips from pre-release levels in making a 1.5173 low, subsequently surging over 1.5300 into the N.Y. open. The dollar lost further ground from there, taking cable to new nearly two-month highs over 1.5335.

    [USD, CHF]
    EUR-CHF rallied to levels last seen on April 6, peaking at 1.0483, and up from pre-N.Y. open lows of 1.0382. The SNB said last week it would reduce the number of institutions exempt from negative interest rates on sight deposits, and could open the door for more negative rates in the near future, perhaps to offset a potential Greece EMU exit. Shorts will be wary going forward.

    [USD, CAD]
    USD-CAD posted fresh three-month lows of 1.2015, after running into solid resistance at 1.2100 early in the session. Option and fund accounts selling was noted from the highs, while firmer oil prices weighed. The 150-day moving average, currently at 1.2018 provided some support, as did noted corporate bids into the 1.2000 level. The pairing moved back over 1.2130 into the close. The Canadian finance minister in testimony, said he expects growth to resume and reach 2% for the full year. He noted that some sectors, such as manufacturing, are benefiting from the low Canadian dollar.

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