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By XE Market Analysis December 9, 2013 2:03 pm
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    XE Market Analysis: Asia - Dec 09, 2013

    FX trade was fairly quiet in N.Y. on Monday, and the dollar was mixed overall, posting modest gains versus the yen, remaining nearly flat against the euro, and losing ground to sterling and the CAD. There was no data to drive trade, though modest Wall Street gains indicated risk appetite holding up, despite the increased threat of Fed tapering following last week's jobs report. EUR-USD meandered inside a 1.3715-30 band, as USD-JPY inched over 10330, up from lows near 102.95. Tuesday's U.S. calendar won't be any more inspiring, with just wholesale data on the docket. Year end is quickly approaching, and trade will continue to thin out as the month progresses, as a result, more market chop can be expected in the days ahead.

    [EUR, USD]
    EUR-USD took a look at prior intra day highs at 1.3730, where offers were said to be in place. Barrier options were noted at 1.3750, and will likely be defended, though without a significant breakout in the near term, we suspect some profit taking may set in. EUR-USD longs had been on the rise over the past week, and some may be getting a bit overextended. The pairing eased back to 1.3715 in afternoon trade, though late in the session managed highs of 1.3745, as light intra day stops were tripped.

    [USD, JPY]
    EUR-JPY hit a fresh five-year peak at 141.57, reflective of continued yen underperformance. Other yen crosses and USD-JPY have remained bid, though below their recent cycle peaks. The latest bearish lead for the yen were disappointing Japanese GDP figures, which revived market talk about the possibility of fresh monetary stimulus by the BoJ. Last week, BoJ boss Kuroda fired off dovish remarks and this had been accompanied by "sources" cited by Reuters that the central bank has a contingency plan for more stimulus. All these factors have effectively reaffirmed the yen's funding currency status. USD-JPY held above the 103.00 level since early in the session, as risk appetite remained marginally positive. Japanese bids are noted into 102.90, though sellers from 103.30 may provide a near term top.

    [GBP, USD]
    Sterling remained broadly underpinned, fitting of the U.K.'s present status of being one of the quickest growing OECD economies. The associated rise in market yields in the U.K have helped revive sterling's status as an asset currency. Thin conditions amid London short covering saw cable ramp up to 1.6415 from lows near 1.6370, and peaked at 1.6425 late in the day, as EUR-USD posted gains

    [USD, CHF]
    USD-CHF's slippage from 0.8915 to 0.8895 late in the session appeared to have impacted the dollar elsewhere, as it fell versus both the euro and GBP. Both EUR-USD and cable moved to session highs of 1.3745, and 1.6425, respectively. USD-CHF stops at 0.8900 were reportedly run through to get the ball rolling. With SNB concerns rising under 0.8900, short covering too USD-CHF back over the figure into the close.

    [USD, CAD]
    USD-CAD found support into 1.0640 overnight, just ahead of bids seen parked at 1.0630. More buyers are reportedly layered down to 1.0600. On the other side of the market, offers were noted from 1.0670 up to 1.0700, with stops from over the figure to 1.0710. Overall however, range trade prevailed through the Monday session, with nothing in the way of economic releases due from either side of the border. The slightly better risk backdrop saw the pairing slip back to 1.0640 from 1.0670 highs.

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