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By XE Market Analysis December 3, 2013 3:23 pm
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    XE Market Analysis: Asia - Dec 03, 2013

    The greenback was a bit softer overall on Tuesday in N.Y. dealings, though for the most part, inside of relatively narrow ranges. There was little in the way of data to drive prices, though Dectaper fears kept risk appetite low, and weighed again on Wall Street. EUR-USD reclaimed the 1.36 handle, though again struggled to maintain altitude. USD-JPY meanwhile, tripped stops at 102.20, and slipped to touch 102.00. Wednesday will bring the November ADP employment report, which will help solidify expectations for Friday's official employment data. In the meantime, major dollar pairings are expected to remain rangebound, though this being said, USD-JPY continues to look vulnerable to further losses.

    [EUR, USD]
    EUR-USD peaked just over 1.3590 early on, rising from near 1.3570 at the open before running out of steam. U.S. name short covering was cited on the way up, though Asian sovereign offers were rumored in place at 1.3600. The soggier risk backdrop continued to weigh on the dollar, though Fed taper concerns should limit USD losses to a degree. EUR-USD later tripped light stops at 1.3600, though again struggled to maintain altitude over the figure. The pairing topped out at 1.3613, and quickly moved back under 1.3600. Intra day profit taking was a feature into the highs, though sagging risk appetite should keep dollar gains contained for the time being.

    [USD, JPY]
    USD-JPY gave the 102.00 level a look, after taking out 102.20 stops earlier. It had been a slow drift lower for the pairing since mid-morning, as stale longs continue to sell out of positions after failing to hold 103.00 overnight. More stops are seen at 101.80, though aside from a band of bids noted at 102.00, serious buying interest reportedly doesn't return until 101.20. The pairing did manage to bounce off od 102.00 into the close.

    [GBP, USD]
    Cable was rangebound through the N.Y. session, finding support under 1.6400, though having difficulty over 1.6425. The pairing remains in buy the dip mode, and as we expect a firm U.K. services PMI tomorrow and an upbeat tone to Chancellor Osborne's presentation of the government's mid-fiscal year update on Thursday, we maintain our Cable target at 1.6500.

    [USD, CHF]
    The CHF rallied in early N.Y. trade, taking EUR-CHF under 1.2280, and USD-CHF toward 0.9020. The rekindling Fed tapering debate should continue to be supportive for the safe haven Swiss currency, as this backdrop should elicit risk aversion in global markets. This said, with the SNB happy to jawbone under the level, traders thought better staying short EUR-CHF under 1.2300, and there was some cross buying evident into the close.

    [USD, CAD]
    USD-CAD made better than three-year highs overnight, clearing the previous 2011 peak of 1.0657, on its way to 1.0664. The August, 2010 high of 1.0673 is now the next upside target. European fund account selling was noted in London morning trade, which left the pairing near 1.0640 into the North American open. Into Wednesday's BoC meeting, we look for further USD-CAD upside risk, as the Bank may up the ante on its dovishness. Interim support is seen into 1.0620. USD-CAD later rallied to just below the August 2010 high of 1.0673, stopping so far at 1.0272 before pulling back slightly. Stops are noted at 10675-80, with fresh bids seen coming in at 106.50.

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