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By XE Market Analysis August 23, 2013 2:51 pm
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    XE Market Analysis: Asia - Aug 23, 2013

    The dollar started the N.Y. Friday session on a slightly firmer footing, though a very weak new home sales outcome sank the greenback from there. EUR-USD found support into 1.3330, and later managed highs over 1.3405. The pairing was not able to hold the figure into the close however. USD-JPY was weighed down by softer Treasury yields, after failing to stay over the 99.00 level. Equities managed small gains however, perhaps mitigating some of the dollar's softness.

    [EUR, USD]
    EUR-USD found support into 1.3330, and made its way higher from mid-morning. The pairing ground through offers from 1.3380 to 1.3400, and peaked at 1.3409 in thinning trade. Fallout from the soft U.S. housing data continued to support the pairing, while more hawkish ECB talk overnight didn't hurt the euro either. Wednesday's 1.3427 high, and Tuesday's 1.3452 peak will be the next upside tests, though sellers are seen waiting in the wings, and it remains to be seen if the 1.34 handle can hold.

    [USD, JPY]
    USD-JPY threatened resistance at 99.15 amid dollar support from macro names, while a reserve manager reportedly has bids at 98.60 and 98.30, keeping bias with the topside. Fund names have been positioning for the topside since large 96.80 stops held on Tuesday. After posting three sessions of higher levels, weak U.S. housing data, lower Treasury yields, and a broadly softer greenback saw profit taking set in. USD-JPY slipped back under 98.40 into the London close, before returning to 98.75.

    [GBP, USD]
    GBP losses were pinned on position adjustment ahead of the long weekend in the U.K. Cable was unable to clear 1.5640 offers following the U.K. Q2 GDP release and moved gradually lower into the N.Y. open. Losses accelerated through support at 1.5550 and were tracked by EUR-GBP gains from 0.8555 to 0.8590. There is speculation of front running ahead of the usual month-end demand in EUR-GBP, while market participants are also preparing for dovish remarks from BoE Governor Carney when he speaks next Wednesday. EUR-GBP gains should slow ahead of double-day highs at 0.8610 from earlier in the month.

    [USD, CHF]
    The CHF is consolidating easier levels. The better tone for equity markets has seen EUR-CHF maintain firmer levels around 1.2350, while USD-CHF is near 0.9250. The CHF weakened earlier in the week on very strong demand for EUR-CHF from Swiss private banks under 1.2300, while a combination of better PMI data and the FOMC reinforced the theme. Ahead of the weekend there was limited appetite to add speculative positions. bot the cross and USD-CHF softened marginally in N.Y. trade.

    [USD, CAD]
    USD-CAD was firm in morning trade, peaking at 1.0568 as Asian growth concerns weighed on the dollar bloc. The pairing later slipped back to 1.0510 on general USD softness, though option and corporate bids noted into 1.0500 put a floor under the pairing. Firmer oil and gold prices supported the CAD to a degree, while narrowing of U.S./Canada rate spreads helped as well.

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