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By XE Market Analysis August 26, 2013 2:17 pm
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    XE Market Analysis: Asia - Aug 26, 2013

    Aside from a blip lower following very weak durables data, the dollar was fairly steady through the N.Y. session on Monday. With London closed, liquidity and overall interest was light, with most major dollar pairings moving inside less than 50 point trading bands. Equities remained near flat, as did Treasuries, as markets re-assess the potential for September Fed taper, following recently soft U.S. economic data. Tuesday's U.S. calendar reveals June S&P/Case-Shiller home prices, August consumer confidence, and the August Richmond Fed index.

    [EUR, USD]
    EUR-USD dipped to 1.3357 from over 1.3370, as the lack of London liquidity allowed U.S. sellers to move the pairing fairly easily early in the session. Standing bids were noted from 1.3350, with stops under 1.3340 now. On the other side of the market, offers are in place from 1.3380. The weak U.S. durables report however, saw the euro rebound back over 1.3390, though selling interest kept the 1.34 handle at bay. The remainder of the session saw the dollar pick up marginal ground.

    [USD, JPY]
    USD-JPY recovered all of its post-durables losses, trading back up to 98.75 highs from its 98.27 low. The pairing remained hemmed in however, with 98.00-99.00 finding good two-way interest of late. Activity may pick up some into month-end on Friday, though for now, bids from 98.20 and offers from 98.80 could contain.

    [GBP, USD]
    GBP trade was practically non-existent today in London's absence, and in N.Y. dealings, cable largely mimicked EUR-USD's prices action, ranging between 1.5612, and 1.5560. BoE Deputy Governor Bean defended the forward guidance, saying that he has been a bit surprised by the market reaction to guidance. He said that guidance is valuable when recovery is gathering pace, that the BoE is giving a clear signal that a tightening is not imminent, and that the 7% unemployment target is sensible. He further stressed that he sees no sign of a housing boom developing and that further QE remains an option.

    [USD, CHF]
    The CHF extended its period of consolidation consolidating in N.Y. on Monday. The generally better tone for equity markets has seen EUR-CHF maintain firmer levels around 1.2350, while USD-CHF has been near 0.9250. The dollar pairing eased from near 0.9250 to 0.9213 after weak U.S. data, though managed to recover over 0.9235 in very light dealings.

    [USD, CAD]
    USD-CAD found support into 1.0500, after falling from session highs over 1.0530. Activity was light overall, though corporate buyers were present from the open. Stops are under 1.0490 and over 1.0550. The pairing flattened out at 1.0510 in sparse afternoon dealings.

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