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By XE Market Analysis December 11, 2013 1:35 pm
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    XE Market Analysis: Asia - Dec 11, 2013

    The dollar again was modestly weaker in N.Y. trade on Wednesday, keeping the USD index marginally under the 80.00 mark for most of the session. EUR-USD ground its way through sellers into the 1.3800 level, eventually touching 1.3810. USD-JPY found support near 102.20, while cable stumbled to 1.6340 lows before inching back to 1.6400. There was no data to drive markets, though risk appetite soured some, despite the potential for a U.S. fiscal deal in Congress. Wall Street sold off fairly sharply, while Treasury yields languished near recent lows. There will finally be some meat on the U.S. economic calendar on Thursday, as retail sales and weekly jobless claims are on deck.

    [EUR, USD]
    EUR-USD had been dead steady inside 1.3760-80, after trading 1.3740-75 in London, though perked up to 1.3794 highs in early trade. Barrier option defense remained in front of 1.3800, with the eventual target over the figure being the 2013 high of 1.3832. The pairing initially failed to pierce 1.3800, with talk of a supranational on the offer into the figure. Pullbacks were shallow however, and the market looked fairly determined to push the euro higher. EUR-USD later printed 1.3800, then quickly headed back under 1.3780. After London cleared out, the euro touched 1.3810, before turning sideways.

    [USD, JPY]
    USD-JPY found support under 102.20, with the 102.20-25 region marking trend and 20-day moving average levels. The pairing bounced subsequently bounced over 102.50, though appeared to run into fresh offers from 102.50. USD-JPY needs to move back over 102.75 to shift current bearish sentiment, though at the moment, that looks like a bit of a longshot.

    [GBP, USD]
    The pound corrected lower in early N.Y. trade, taking a dive after trading at two-year peak against the dollar and five-year highs against the yen yesterday. GBP-USD trend support at 1.6355 was breached, and 1.6320-25 area is initial support, though the pairing managed to find a floor at 1.6340 before recovering. With the dollar continuing to fare poorly overall, cable managed to later print 1.6404 highs.

    [USD, CHF]
    The CHF is likely to remain well supported into next week's FOMC meeting in the U.S. as a significant portion of market participants are anticipating the Fed to commence QE tapering, which in the event may trigger a more sustained period of risk aversion in global financial markets. The ascent of the CHF-JPY cross to a 23-year peak is testament to the strength of the safe haven Swiss currency. USD-CHF, meanwhile, has logged a two-year low to 0.8850, and EUR-CHF a seven month low of 1.2205, which is two big figures above the SNB's 1.2000 limit.

    [USD, CAD]
    USD-CAD gave up the 1.0600 handle after posting lower daily highs this week. The pairing has been trending lower with the USD overall, while firm oil and commodity prices have been CAD supportive. Corporate buyers under 1.0600 stepped in however, and limited downside to 1.0585 early in the session. The pairing recovered to 1.0620 as oil prices faded, though a move over 1.0650 will be needed to shift the currently bearish tone.

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