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By XE Market Analysis December 10, 2014 3:04 pm
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    XE Market Analysis: Asia - Dec 10, 2014

    The dollar was mostly lower in N.Y. trade on Wednesday, again moving over 1.24 versus the euro, though staying under Tuesday's peak of 1.2447. USD-JPY lost ground, though again, remained above the 117.97 base printed on Tuesday. Aside from weekly EIA petroleum inventory data, the U.S. calendar was empty, though the sharp builds in crude and products resulted in yet another steep crude sell-off. This helped USD-CAD to print marginal new trend highs of 1.1502. Cable reclaimed the 1.57 handle. Yields stayed down through the session, as Wall Street again had a rough outing.

    [EUR, USD]
    EUR-USD took out the 1.2400 level, moving to a 1.2408 peak, after opening near 1.2370, as Wall Street losses accumulated, and yields stayed down. Tuesday's 1.2447 highs marks initial resistance, though standing offers were noted from 1.2410-30 now, which slowed gains going forward. Some talk of 600 mln EUR-USD on the offer between 1.2440 and 1.2450 was heard late in the session, via the Twitterverse, which kept a top on the pairing. The euro has peaked at 1.2444, just under Tuesday's 1.2447 high.

    [USD, JPY]
    USD-JPY held the 118.15 level through the afternoon, coming off of 119.13 highs early in the session. The usual mix of lower yields and soggy equities provided the anchor on the pairing, and we suspect into this weekend's Japanese elections, consolidation may be the game plan through the remainder of the week.

    [GBP, USD]
    Cable has settled around 1.5675 after some choppy price action. Liquidity is reportedly on the low side, as is the case in other currency pairings as year-end approaches. Hawkish remarks from BoE MPC member McCafferty had little lasting impact, as he largely repeated arguments that he has been making since August, namely that it would be better to tighten policy earlier but gradually to avoid risk of greater disruptions down the line. Cable found good support in N.Y. into 1.5680, and managed highs over 1.5715 in afternoon trade.

    [USD, CHF]
    EUR-CHF has continued to ply a narrow range near 1.2020, giving the SNB a little space between spot levels and its rumoured buffer zone between 1.2010 and the 1.2000 franc cap. Foreign currency reserves data out of Switzerland showed an increase to CHF 462.4 bln in November from CHF 460.0 bln in September. This prompted market speculation that the increase was as a consequence of intervention, though the SNB refrained from providing an explanation.

    [USD, CAD]
    USD-CAD posted modest gains overnight, peaking at 1.1469 in London, after trading briefly under 1.1400 in North America on Tuesday. The pairing eased into 1.1445 into the open on reported domestic name selling, though quickly recovered as pil prices hovered near five-year lows. WTI traded at $62.50 early on, with a break below trend lows of $62.21 resulting in follow through selling. USD-CAD popped to intra day highs of 1.1502 from under 1.1470 following the post-EIA oil market sell-off, and comments from BoC's Poloz, who concurrently said in wire headlines, a persistent drop in oil prices will weigh on the economy, and noting risks from global slowing, and Canadian household balance sheets. USD-CAD offers are in place at 1.1500 now, though stops are building from 1.1510.

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