Home > XE Currency Blog > XE Market Analysis: Asia - Aug 29, 2013


XE Currency Blog

Topics7692 Posts7737
By XE Market Analysis August 29, 2013 2:24 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 5616
    XE Market Analysis: Asia - Aug 29, 2013

    The dollar moved higher on the back of an in-line jobless claims print, and a better than anticipated Q2 GDP revision. Risk appetite was improved overall, and Wall Street rallied, perhaps as a military strike on Syria seemed less imminent. EUR-USD fell from over 1.3260 to lows near 1.3220, while USD-JPY traded over 98.50 on the better U.S. data. Friday's calendar brings personal income and PCE data, along with the Chicago ISM, and U. of Michigan sentiment. With a long weekend coming up for North America, we expect trade to dry up early on Friday.

    [EUR, USD]
    EUR-USD dipped from session highs of 1.3266 in the aftermath of the better U.S. growth data, making its way to near 1.3230. The pairing continued to hold under 1.3250 through the remainder of the session, with offers seen at the level. There were apparently some unfilled stops at 50 the first time down, which needed to be covered. Downside was limited to 1.3220, with standing bids noted from 1.3210.

    [USD, JPY]
    USD-JPY consolidated close to intra-day highs as market participants awaited U.S. jobless claims and revised GDP data. The dollar pairing broke higher in late Asia on Asian central bank demand and month-end flows, while better U.S. growth data saw the pairing jump over 98.50 from 98.30. Japanese offers from 98.30 to 98.50 absorbed follow through gains.

    [GBP, USD]
    Cable was still tied to 1.5500, where option maturities exerted a pull throughout the European morning. Underlying dollar strength limited upside momentum, but sterling showed resilience via the crosses. In particular, EUR-GBP saw an absence of usual month-end flows and was weighed by liquidation of long positions. GBP-CHF also experienced very good demand as the prospect for an imminent Syrian strike faded.

    [USD, CHF]
    CHF was weighed by the improvement in risk appetite. However, most of the action was driven by the USD and followed closely by GBP flows. Month end related dollar demand and the rise in U.S. yields lifted USD-CHF over 0.9300 for the first time in two-weeks. EUR-CHF gradually edged away from 1.2300 and extended through 1.2315 following U.S. data, although it is still struggling due to today's EUR correction and recent topside failures. We are doubtful though on EUR-CHF's ability to sustain higher levels given geopolitical risks and pre-weekend action could be less favourable for speculative positioning.

    [USD, CAD]
    USD-CAD reclaimed the 1.05 handle in London trade, though was pushed back under the figure in early North America. The mix of data from either side of the border took the pairing to intra day highs of 1.0515. After a brief dip under 1.0500, it managed highs near 1.0530. Initial resistance is seen at 1.0540, with large stops said to be building at 1.0570 now.

    Paste link in email or IM