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By XE Market Analysis April 30, 2015 2:28 pm
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    XE Market Analysis: Asia - Apr 30, 2015

    The dollar rallied early in the session, following a 15-year low initial jobless claims print, and an uptick in ECI. After peaking at 1.1250 in London, EUR-USD slipped to 1.1117 lows following the data. As Wall Street faltered however, the euro made its way back over 1.1200. USD-JPY meanwhile, rallied to 119.89 highs, after finding support into 118.50 overnight. This level has marked the low for the past month. USD-CAD found buyer into the 1.200 mark, before rallying over 1.2130 on initially weaker oil and gold prices. With the Fed entirely data dependent now, the FX market may indeed react more forcefully to individual releases, though until we see some overall improvement in data trends, sustainable dollar gains may be hard to come by going forward.

    [EUR, USD]
    Dollar gains were significant since the 8:30 EDT round of data, resulting in EUR-USD down as much as 130 points from overnight highs, to a low of 1.1117. Later however, N.Y. session EUR-USD losses were largely erased, with the pairing back over 1.1200. Another equity market sell off hasn't helped sentiment, while impact of better U.S. data this morning largely ran its course.

    [USD, JPY]
    USD-JPY posts new highs for the week, peaking at 119.89, a sharp rally from overnight lows of 118.50. The BoJ's downgraded inflation and growth forecasts weighed on the yen overnight, while the perkier US. data this morning kept the rally intact. Bigger picture however, pent up yen demand from Japanese exporters will keep gains above 120.00 limited for now, and USD-JPY can be expected to remain inside of its broad 118.50 to 120.50 band that has been in place for a month.

    [GBP, USD]
    Cable traded lower through the N.Y. session, following teh dollar's firmer tone in the aftermath of better U.S. data. The pairing had stalled out just ahead of the 1.5500 mark in London trade, where options sellers werre reportedly lying in wait. Sterling started near 1.5420, eventually making its way to 1.5304 lows.

    [USD, CHF]
    EUR-CHF rallied to levels last seen on March 26, peaking at 1.0508. Sellers emerged over the figure, taking the cross back into 1.0430 into the close. 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 showed minimal reaction to the earlier Canadian GDP data. falling briefly to North American lows of 1.2003, before heading higher. The pairing later peaked at 1.2131. The greenback's broader rally helped sentiment, while the sharp sell-off in gold prices (futures down 2.6% at $1,178), and WTI crude back under $59, weighed further on the CAD. Since the end of March, USD-CAD fell as much as 6.5%, so some month-end short covering was not be too surprising.

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