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By XE Market Analysis December 3, 2019 2:45 pm
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    XE Market Analysis: Asia - Dec 03, 2019

    The Dollar fell broadly again in N.Y. trade on Tuesday,leaving the DXY at one-month lows of 97.65, down from 97.85 at the open, and 98.38 at Monday's peak. There was no data today, though fallout from Monday's weak manufacturing ISM and slide in construction spending continued to a degree. A fresh eruption of trade fears took Equities and Treasury yields sharply lower, both weighing on the USD. Trump said he might wait until after the election to make a deal with China, while reports circulated that additional tariffs, set for December 15 would be implemented on schedule. EUR-USD rallied to 1.1093 highs from near 1.10470, as USD-JPY slid to 108.48 from 108.84 into the open. USD-CAD topped at 1.3321 early, later easing back to 1.3294. Cable rallied to six-week highs of 1.3011, up from mid-morning lows of 1.2975.

    [EUR, USD]
    EUR-USD printed near two-week highs of 1.1093, coming from 1.1070 at the open. The pairing followed through some from Monday's sharp gains, which came on the back of weak U.S. data, with today's modest rally the result of of renewed trade concerns, and sharply lower Treasury yields. Markets will be watching incoming data closely, including vehicle sales, the service ISM, trade, factory orders and employment figures, all starting on Wednesday, to get a better handle on where the economy is at.

    [USD, JPY]
    USD-JPY traded to eight-session lows of 108.48, down from overnight highs of 109.20. Trade angst has returned in full-force, with new U.S. tariffs being threatened, and Trump indicating he might wait until after the 2020 election to make a trade deal with China. The risk-sensitive pairing has succumbed to the rout on Wall Street, along with sharply lower Treasury yields. The 50-day moving average at 108.47 provides a support level, though a break there will likely see the November 21 low of 108.28 targeted.

    [GBP, USD]
    Cable printed a six-week high at 1.3011, coming from 1.2931 lows seen in Asia. With just nine days to go until the election, it's looking less likely that Labour will be able to close the polling gap with the Conservative party. Politicos poll tracker is showing the Conservative party with 43% support, unchanged from Friday, and Labour with 33%, up two points from Friday. While there looks to have been late tick higher in support for Labour, there is no sign of a surge, and it continues to look likely that PM Johnson's Tories will be returned to parliament with a working majority.

    [USD, CHF]
    EUR-CHF fell to a two-week low under 1.0930 ion N.Y., coming from overnight highs of 1.0993. Broad risk-off conditions weighed on the cross, as trade concerns ramped up yet again, and EUR-USD moved toward the key 1.1100 mark, a nine-session high.

    [USD, CAD]
    USD-CAD rallied to near two-week highs of 1.3321, up from London morning session lows of 1.3283. The rally has come on the back of fresh trade concerns, as the U.S. targets Brazil, Argentina, and most recently France, with new tariffs. Resulting risk-off conditions, including lower oil prices, have supported the pairing this morning. Later, a generally weaker USD dragged the pairing to 1.3294 lows. Next upside target comes at 1.3328, the November 20 high, with support at the 200-day moving average at 1.3279. Consolidation is likely overnight ahead of Wednesday's BoC policy meeting, where no rate changes are expected.

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