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By XE Market Analysis December 4, 2018 3:16 pm
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    XE Market Analysis: Asia - Dec 04, 2018

    After falling overnight, the DXY rallied through the N.Y. session on Tuesday, topping at 97.12 from lows of 96.39 into the open. There was no data to drive the market, though uncertainty over trade (Trump tweet: "I am Tariff Man") spooked markets, resulting in safe-haven flows into the Dollar (and Yen). EUR-USD topped at 1.1418 in London, before falling to 1.1319 lows. USD-JPY bottomed at 112.59 from morning highs of 113.02, while USD-CAD peaked at 1.3258. Cable printed near 18-month lows of 1.2660.

    [EUR, USD]
    EUR-USD fell to intra day lows of 1.1319 after the London close, with the Dollar and Yen benefiting from the extreme Wall Street sell-off and general risk aversion on the back of trade concerns and an inverted section of the U.S. Treasury curve. Euro sell-stops are now noted at the 1.1300 level.

    [USD, JPY]
    USD-JPY fell to two-week lows of 112.73 into the N.Y. open, before recovering briefly back above the 113 level. Risk-off was in place again today, which weighed, while general Dollar weakness, largely due to skepticism over the U.S./China trade truce, has kept pressure on the pairing as well. Later, as the Dow fell 800 points, USD-JPY bottomed at 112.59.

    [GBP, USD]
    Cable fell to 1.2660 lows after the London close, levels last seen in June of 2017. News that the EU's Advocate General said that the UK should be able to unilaterally revoke Article 50 and remain in the EU if it so desires sparked a 1 big figure rally in Cable, though gains were short lived, as risk taking levels plunged, supportive of the Dollar.

    [USD, CHF]
    EUR-CHF fell back into the 1.1300 level in N.Y. on Tuesday, as EUR-USD fell along with equities following a Trump tweet saying he is a "tariff man". Risk-off conditions saw the Franc benefit from safe-haven flows.

    [USD, CAD]
    USD-CAD moved up from its earlier low of 1.3165, topping over 1.3200, as WTI crude prices pulled back from eight-session highs of $54.55, trading under $53.00. Risk-off conditions have returned, as markets re-think the potential for a U.S./China trade agreement. This has also weighed on the CAD so far this morning. Later, the pairing rallied to session highs of 1.3258, supported by safe-haven USD buying, and softening oil prices. WTI crude struggled to hold gains after Saudi's energy minister told Bloomberg it was "premature" to figure out the level of oil production cuts needed.

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