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By XE Market Analysis August 17, 2017 2:29 pm
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    XE Market Analysis: Asia - Aug 17, 2017

    The dollar was mixed in N.Y. trade on Thursday, losing ground to the euro and yen, while posting modes gains against the CAD. Cable was relatively steady. Incoming U.S. data was net positive, as jobless claims fell more than expected, the Philly Fed fell less than anticipated, and industrial production was firmer, though under consensus forecasts. U.S. politics entered the fray again, as rumors that Trump's chief economic advisor Cohn would resign, leaving the administrations agenda in jeopardy. Stocks slid, weighing on the dollar. EUR-USD bottomed at 1.1663 into the open, after ECB minutes revealed concern over euro strength. The pairing later rallied to 1.1754 highs. USD-JPY fell to 109.63 before recovering marginally, while USD-CAD rallied to 1.2665 following soft Canadian manufacturing data, and soft oil prices. Cable was range bound inside of 1.2865 and 1.2899.

    [EUR, USD]
    EUR-USD fell to three-week lows of 1.1662 following the release of the ECB minutes ahead of the open. The move came as the Bank showed raised a red flag over euro strength, saying it is concerned over possible "overshooting" in the future. From there, the euro found support into the N.Y. open, as U.S. politics crept back into the markets. EUR-USD rallied over 1.1750 after the London close, as risk-off conditions persisted.

    [USD, JPY]
    USD-JPY slid to 109.63 lows earlier, coming from 110.37 highs into the N.Y. open. The sell-off was in concert with Wall Street's dive, which apparently came on the back of rumors that Trump's chief economic adviser Cohn might resign, thereby risking U.S. tax reform, which is expected later in the year. This rumor has subsequently been downplayed, seeing stocks move off their worst levels, and USD-JPY bouncing briefly over 110.00.

    [GBP, USD]
    Sterling traded mixed over the last day, gaining versus a generally softer euro while losing ground to the dollar. This follows underperformance phase, with the pound showing an average 2.3% loss to the G3 currencies over the last month. The pound had lost nearly 11% of its value relative to the euro over the last four months, before today's fractional rebound. Cable managed to remain above Wednesday's one-month low, bottoming at 1.2853 into the N.Y. open.

    [USD, CHF]
    EUR-CHF tipped down to 1.1282 lows, extending the losses from levels near 1.1500. Outsized losses in USD-CHF have been a factor amid political turmoil and dovish-leaning FOMC minutes. The price action also suggests that the Swiss franc still has vestiges of being a safe haven, despite the SNB's best efforts to dismantle it. We still look for EUR-CHF to eventually "close the gap" by returning to the 1.2000 level, which had been the SNB's floor until abandoning it in January 2015.

    [USD, CAD]
    USD-CAD was lifted by the weak Canadian manufacturing data early in the session, taking the pairing from opening lows near 1.2615 to highs of 1.2665. Overnight, USD-CAD had rallied from a two-week base of 1.2589, supported by further oil price weakness. U.S. politics continued to roil markets, with the latest event being rumors that Trump's chief economic advisor Cohn may resign. Wall Street took a tumble on the rumors, supporting USD-CAD as risk-off conditions emerged again.

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