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By XE Market Analysis April 30, 2020 2:49 pm
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    XE Market Analysis: Asia - Apr 30, 2020

    After an early attempt to rally, the Dollar headed lower against the Euro and Pound in particular, taking the DXY to near three-week lows of 98.92. Much weaker incoming U.S. data, including another huge increase in jobless claims, and a plunge in earnings and consumption were drivers of USD weakness, though month-end flows were noted as well. Wall Street tanked on the back of the data, while safe-haven Treasuries remained in demand. EUR-USD spiked to 1.0972 from lows of 1.0833. USD-JPY rallied to 108.22 from 106.45, while USD-CAD topped near 1.3960, up from 1.3860 at the open. Cable rose over 1.2640 from early lows of 1.2476.

    [EUR, USD]
    EUR-USD dipped to 1.0833 from over 1.0880 following the ECB announcement, which left rates unchanged, as expected. The Bank remained focused on liquidity provisions, with no additional asset purchases in the mix. This saw European stock markets heading lower. EUR-USD later rallied from the lows, trading to two-week highs of 1.0972. The pairing has since steadied over 1.0940. The rally came as the ECB didn't go as far as some expected with regards to further stimulative moves, while weak U.S. data weighed on the Dollar. In addition, talk of month-end flows into the Euro was heard, while waning optimism for a quick U.S. recovering has weighed on the USD.

    [USD, JPY]
    USD-JPY rallied to 107.22 highs, up from lows of 106.45, despite general USD weakness, prompted by very weak U.S. data. Risk-off conditions generally weigh on the pairing, though today, there have been reports of month end flows out of the Yen, with the Dollar proceeds heading into U.S. Treasuries. Tuesday's high of 107.34 marks the next resistance level, with support at Wednesday's low of 106.36.

    [GBP, USD]
    Cable printed 15-day highs of 1.2643 in N.Y. morning trade. Dollar weakness following the run of horrible U.S. data was the main driver of the move higher. The 200-day moving average, currently at the 1.2647 level is the next major resistance level. We have been arguing that with many economies reopening, or heading for reopening, that the worst looks to be over for the Pound, which underperformed during the more acute risk-off phases over the last couple of months.

    [USD, CHF]
    EUR-CHF pulled back from April highs of 1.0611 seen on Wednesday, as risk-taking levels turned lower again. The SNB has successfully been putting a cap on the franc, which has seen EUR-CHF in recent weeks skirt along just above the five-year low that was first seen on March 9th at 1.0505 without breaching it. Weekly sight deposit data out of Switzerland has pointed to the extent of SNB franc selling over the pandemic crisis period, which was most acute in March before basing out as global governments and central banks acted with interventions and stimulus packages.

    [USD, CAD]
    USD-CAD hit six-week lows of 1.3850 ahead of the North American open, the move driven by WTI oil prices which surged to one-week highs over $18.00/bbl. The pairing later recovered to 1.3959 highs, as WTI crude gave back gains, falling to lows under $16.70, as risk-off conditions returned. After trading under 50-day moving average, currently at 1.3917, the pairing was set to close the session above the level.

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