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By XE Market Analysis December 5, 2019 2:48 pm
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    XE Market Analysis: Asia - Dec 05, 2019

    The Dollar posted its fourth consecutive day of losses on Thursday, though ranges were tight, leaving the DXY at a one-month low of 97.36. Incoming U.S. data was decent, but went little way to support the USD. The trade deficit narrowed, jobless claims were lower, while factory orders were in-line with expectations. Trade uncertainty has remained a weight on the Dollar of late, despite upbeat comments from both the U.S. and China. EUR-USD was stuck between 1.1089 and 1.1108, while USD-JPY slipped from 108.92 to 108.66. USD-CAD traded between 1.3158 and 1.3187, as Cable rallied to 1.3166 from 1.3125. FX can be expected to remain slow overnight, ahead of Friday's key November U.S. employment report.

    [EUR, USD]
    EUR-USD appears to have entered a consolidation phase, after failing to close above the key 1.1100 level on Wednesday, and failing on Thursday to even test the 1.1116 high again. Today's trading range has been confined to a narrow 1.1089 to 1.1108 band. Given recently softening U.S. data, along with some stability in Europe, the next move for the Euro may be to the upside. The 200-day moving average at 1.1159 is the next major upside target, followed by September highs of 1.1180.

    [USD, JPY]
    USD-JPY faded near the 108.70-80 mark through much of the morning, after bottoming at 108.78 in early trade, and peaking at 108.92 following the better early round of data. Treasury yields were bit bit firmer, though Wall Street faded from opening gains, result in a USD-JPY low of 108.66 in light afternoon trade. News on the trade front will be closely monitored, as on-again, off-again headlines tend to shake-up the risk-sensitive Yen. For now though, we look for USD-JPY to trade on either side of its 200-day moving average, currently at 108.87.

    [GBP, USD]
    Cable printed a seven-month high at 1.3166 into the London close. On the Pound side, Sterling has continued to see its Brexit discount unwind with markets factoring in a Conservative win, with a working majority, at the general election next Thursday. Politico's poll track has the Conservatives with 43% support, unchanged from Monday, and Labour with 33% support, also unchanged from Monday. The gap is seen as being beyond the margins of error in polling methodology, and sufficient to return Johnson as prime minister with a working majority.

    [USD, CHF]
    EUR-CHF fell to a two-week low under 1.0925 in N.Y. on Wednesday, later bouncing to 1.0969 as risk appetite returned following reports that the U.S. and China are near a phase one trade deal. Broad risk-off conditions weighed on the cross on Tuesday, as trade concerns ramped up yet again.

    [USD, CAD]
    USD-CAD recovered some from one-month lows of 1.3158 seen early in the session. A neutral sounding BoC on Wednesday saw the pairing fall from near 1.3300 to under 1.3200. A slight narrowing of the Canadian trade deficit this morning pushed the pair to its bottom, though a downdraft in oil prices at mid-morning helped USD-CAD to 1.3187 highs. Oil prices later recovered on reports that OPEC + may cut output an additional 500k bpd, which capped off USD-CAD.

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