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By XE Market Analysis August 19, 2019 3:01 pm
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    XE Market Analysis: Asia - Aug 19, 2019

    The Dollar was rangebound in N.Y. on Monday, leaving the DXY between 98.18 lows at the open, and 98.27 after the London close. There was no data to drive the market. Wall Street was higher on trade negotiation hopes, while Treasury yields edged higher as well. EUR-USD slipped from 1.1104 to lows under 1.1090 later in the session. USD-JPY topped at 1.0670 into the open, later easing to 106.46 lows before turning sideways on either side of 106.50. USD-CAD bottomed at 1.3251 into the open, later rallying over its 200-day moving average to highs near 1.3330. Cable meanwhile, opened near 1.2105, before making its way to 1.2157 into the London close.

    [EUR, USD]
    EUR-USD topped at 1.1113 into the N.Y. open, later making its way to 1.1093 following the London close. Friday gains came following reports the German government will implement a fiscal stimulus plan, though the Euro has failed to advance above the 1.1113 peak as the new week starts. Prospects for "impactful and significant" stimulus, as touted by ECB Rehn last week, will likely contain EUR-USD gains going forward, especially if risk levels remain positive overall. Another stock market rout though, accompanied by another dive in yields, will up the chances for more aggressive Fed easing, which would likely then take EUR-USD higher.

    [USD, JPY]
    USD-JPY rallied to 106.70 into the N.Y. open, up from overnight lows of 106.24, seen in early Asia. Risk-on conditions supported to a degree, with higher Treasury yields and a rally on Wall Street the drivers. Trade wars and global slowing concerns remain on traders' radar screens however, with this backdrop likely to see risk taking levels shift from positive to negative quickly, depending on the Tweet or the headline. As a result, USD-JPY can be expected to remain choppy, though within the well-worn 105.000 to 107.00 trading band seen over the past two-weeks.

    [GBP, USD]
    Sterling pared losses into and after the London fixing, which saw Cable recoup to around the 1.2155 area, which is about 50 pips up on the intraday low, and EUR-GBP ebb back to the 0.9125 area, which is about 45 pips down on the intraday peak. Relatively thin conditions, on a Monday in summer, has been a cause of the whippy price action, and more choppiness is likely into the reopening of UK parliament in a couple of weeks time, which is when battle will commence between anti-no-deal and pro-no-deal Brexit factions.

    [USD, CHF]
    EUR-CHF stemmed its recent bleeding in N.Y. on Friday, as the CHF was sold off modestly on the back of the return to risk-on conditions. Thursday marked the lowest seen since mid-June of 2017. From here, upside price action may be limited, as the ECB is on course for additional monetary stimulus in September, perhaps more aggressively than initially thought, and the likelihood for further risk aversion in global markets remains high. This said, another risk-on session Monday saw the cross top at 1.0896, a four-session high.

    [USD, CAD]
    USD-CAD pulled back to four-session lows of 1.3251 into the North American open, down from London morning highs of 1.3277. Buyers later stepped in on the back of firmed up Treasury yields and risk-on conditions. Buy-stops were later noted at 1.3300 which provided enough follow through buying to take out the 200-moving day average at 1.3305. The pairing later topped at 1.3328. Canada's data slate comes into focus now, with manufacturing figures due Tuesday, CPI on Wednesday, and retail sales on Friday.

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