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By XE Market Analysis August 2, 2019 3:07 pm
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    XE Market Analysis: Asia - Aug 02, 2019

    The Dollar ended lower in N.Y. on Friday, rallying briefly following a decent July jobs report, later heading lower on end-of-week position squaring. Trade, factory, and confidence figures were mediocre. Yields and Wall Street headed lower again on ongoing U.S./China trade concerns. EUR-USD recovered from the two-plus year lows of 1.1027 lows seen Thursday, peaking on Friday at 1.1116. USD-JPY slid to levels last seen in January, bottoming at 106.51. USD-CAD initially rallied after the early data, seeing a high of 1.3265, then later stumbled to 1.3200 lows as oil prices bounced. Cable ran up over 1.2160 from opening levels near 1.2100. Trade fears, an accompanying concerns over global slowing will remain the focus as we look to next week.

    [EUR, USD]
    EUR-USD slipped to session lows following the July jobs report, touching 1.1078 low. The pairing spent the remainder of the session pushing higher, eventually topping over 1.1115. Luke-warm U.S. data from then weighed on the USD some, though following a very volatile week in FX Land, traders apparently put on foot on the sidelines into the weekend, which kept price action contained. The ramp up of trade concerns since Trump's tariff tweet on Thursday, may keep the Dollar supported going forward, as safe-haven flows may pick up steam.

    [USD, JPY]
    USD-JPY fell to its lowest level since the January 3 "flash crash", bottoming at 106.51 following the U.S. data. Risk-off conditions in place since Trump announced new tariffs on China goods on Thursday, has seen the pairing fall from two-month highs of 109.31 on Thursday, to this morning's seven-month low. Short covering set in briefly, prompted by the sharp turn higher in the equity futures market. USD-JPY later peaked at 107.20. These gains were short-lived, as Wall Street again slid sharply.

    [GBP, USD]
    Cable racked up another down week. This will make it the 13th consecutive down week against the euro, and its 10th down week out of the last 13 weeks versus the dollar. We see little scope for a rebound at the current juncture, with markets demanding a hefty discount in sterling due to the no-deal Brexit risk, and the possibility of an October-31 overnight departure from the EU free trade area and its 40 trade agreements with 70 countries. GBP-USD bottomed at 1.2091 in Europe, later rallying over 1.2160 in N.Y. trade.

    [USD, CHF]
    EUR-CHF has taken as sharp dive over the last few sessions, extending to a 25-month low at 1.0909 today. The ECB's course to additional monetary stimulus in September, and risk aversion in global markets following Trump's escalation in his trade way with China, have been weighing on the cross. The risk of a disorderly no-deal Brexit on October 31 is also in the mix, which is a bearish factor for the cross.

    [USD, CAD]
    USD-CAD rallied to six-week highs of 1.3265 after the trade data, which were in line with forecasts. The pairing had been on the rise since the open, with buyers stepping in on the decisive break above the 50-day moving average which sits at 1.3218. Resistance is now at the 200-day moving average at 1.3297. The pairing later eased down to test the 1.3200 handle, as oil prices moved higher. This week, USD-CAD manage four straight sessions of higher daily highs, a technical positive.

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