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By XE Market Analysis December 10, 2019 1:56 pm
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    XE Market Analysis: Asia - Dec 10, 2019

    The Dollar was touch lower in N.Y. trade on Tuesday, though the DXY remained inside of the week's range so far, basing at 97.44 from highs of 97.60 seen during the morning session. A report that the U.S. and China are discussing delaying new U.S. tariffs set to kick off this Sunday, and the USMCA trade agreement announced had mixed impact on the USD, supporting the risk-sensitive USD-JPY, while seeing the Euro post gains as safe-have USD flows were reversed some. The Democrats announcing articles of impeachment against Trump were largely shrugged off. Wall Street was narrowly mixed, and Treasury yields were s bit higher. EUR-USD peaked at 1.1097 from lows of 1.1075, as USD-JPY ranged between 108.54 and 108.76. USD-CAD eased to 1.3228 from 1.3250, as GBP-USD topped at 1.3189, later easing into 1.3155.

    [EUR, USD]
    EUR-USD headed to highs of the week, topping in N.Y. at 1.1097, and up from European lows of 1.1065. A 21-month high in the German ZEW sentiment indicator helped the Euro to an extent, though the highs came during the N.Y. morning session, where hopes for the delay of new U.S. tariffs due this Sunday, along with the Democrats announcing 2 articles of impeachment against President Trump combined to take a bid out of the Dollar. EUR-USD resistance falls between 1.1100 and 1.116, which was the high of last week.

    [USD, JPY]
    USD-JPY rallied briefly to 108.75 highs from near 107.55 on the WSJ report that the U.S. and China are discussing delaying the new U.S. tariffs due to kick in this coming Sunday. The risk-sensitive pairing got its minor boost as equity futures turned early losses into gains, though Wall Street has since turned modestly lower, seeing the Dollar head back toward 108.55 again. With data out of the way, further USD-JPY direction today will likely be linked to the risk backdrop.

    [GBP, USD]
    Cable hit a fresh eight-month high of 1.3189 into the N.Y. open. Markets have factored in a Conservative victory, with an outright majority, at Thursday's UK general election, based on public opinion polling, though political pundits have been stressing that undecided votes are making this election tricky to call. Polls have suggested most undecided voters are people who voted for Labour in 2017, suggesting there is possibility for an unexpectedly strong showing for Labour. Regarding Brexit, any outcome in the election other than a Conservative with majority would put a second referendum on EU membership back on the table.

    [USD, CHF]
    EUR-CHF has settled in the mid to lower 1.0900s after a spell of relatively choppy trading. The cross has managed to base above the three-week seen last Wednesday at 1.0921 after rotating lower from levels above 1.1000. The cross to a degree been correlating with the ebb and flow of global stock markets, with the franc retaining a function as a safe haven currency despite the -0.75% deposit rate in Switzerland.

    [USD, CAD]
    USD-CAD peaked at 1.3246 intra day highs, up from London lows of 1.3224. The pairing remained inside of Monday's trading range, indicative of a lack of directional clues, and a period of consolidation. USD-CAD support is now at the 50-day moving average of 1.3216, with resistance at the 20-day moving average at 1.3259, then Monday's high of 1.3265.

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