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By XE Market Analysis August 10, 2018 3:25 pm
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    XE Market Analysis: Asia - Aug 10, 2018

    The Dollar soared to better than one-year highs in N.Y. on Friday, taking the DXY to levels last seen on July 7 of last year. The Greenback had been on the move higher during the London morning session, as Turkey melted down on economic turmoil there, made worse later by the doubling of U.S. sanctions on Turkish steel and aluminum imports. USD-TRK at one point rallied 20% to 6.7596. The Euro was heavily impacted, due to EU bank exposure to Turkey, EUR-USD fell to 1.1388 after opening near 1.1460. USD-JPY fell to 110.52 lows from 111.10, bucking the Dollar trend, as the risk sensitive Yen remained firm. USD-CAD bounced to 1.3154 highs on a less than stellar Canada jobs report, and on general risk aversion. Cable slumped to 1.2723 lows, levels last seen in June of 2017.

    [EUR, USD]
    EUR-USD printed new 13-month lows of 1.1388, after crashing from overnight highs of 1.1537. The Euro came under pressure as the Turkish Lira fell to new record lows, which in turn came amid reports that the ECB's supervisory arm has raised concerns about the exposure of European banks to Turkish assets. Next support comes at 1.1373, which was the July 13, 2017 low.

    [USD, JPY]
    USD-JPY has been relatively steady through the session, unlike Cable or EUR-USD. The risk sensitive Yen has held up well, seeing USD-JPY fall under 111.55, a one-month low, from highs over 111.10. Geopolitical tensions have weighed on the pairing, as trade issues bubble with China, rhetoric heats up in Iran, and Turkey melts down on economic turmoil there, including the doubling of U.S. sanctions on Turkish steel and aluminum imports.

    [GBP, USD]
    Cable dove to a fresh one-year low of 1.2723 before finding a footing. Reports of UK banks exposure to Turkish markets, which are descending further into turmoil, weighed on the Pound today, while the Dollar outperformed notably. The Pound has concurrently recouped some lost ground against the Euro. Cable is set to make this the fifth consecutive week of declines. Political uncertainty has soured sentiment, lifting the Brexit-risk discount being asked of the UK's currency. Former foreign secretary Boris Johnson looks to be scheming to make a leadership challenge on Prime Minister May, adding to the growing concern that the UK could leave the EU next March without a new agreement on trade or other issues having been agreed on.

    [USD, CHF]
    EUR-CHF was crushed to near one-year lows of 1.1340 in N.Y. on Friday, as the Euro was beaten down on EU bank exposure to Turkey, while at the same time the Franc remained relatively bid on the back of safe-haven flows.

    [USD, CAD]
    USD-CAD was little changed after the Canada jobs report, where the headline job gains were higher than expected, though the drop in full time employment and slowing wage growth took some shine off the report. USD-CAD gyrated between 1.3098 and 1.3070 immediately following the data. The pairing had topped at near three-week highs of 1.3123 overnight, as general USD strength supported. Later, as risk-off conditions accelerated on the back of Turkey tariffs, the pairing shot up to near three-week highs of 1.3154.

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