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By XE Market Analysis December 11, 2018 2:56 pm
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    XE Market Analysis: Asia - Dec 11, 2018

    The Dollar moved higher in N.Y. on Tuesday, aided early on by warmer core U.S. PPI data. The Dollar index posted two-week highs of 97.53 before steadying. Wall Street kept a bid in the dollar, as choppy conditions there provided some safe-haven USD flows. EUR-USD fell from highs of 1.1400 into the open, bottoming at 1.1307 after the London close. USD-JPY topped at 113.47, though remained near one-week highs. USD-CAD reclaimed the 1.34 handle, peaking at 1.3424 as oil prices came off their highs. Cable meanwhile, printed trend lows under 1.2500.

    [EUR, USD]
    EUR-USD remains heavy, printing eight-session lows of 1.1307, as the Dollar overall posts gains, and as Brexit and the weak Pound provides additional weight on the Euro. The warmer U.S. core PPI reading got the EUR selling ball rolling early on, falling from 1.1385 after failing to break above the 1.1400 level ahead of the open.

    [USD, JPY]
    USD-JPY topped at six-session highs of 113.47 earlier, since pulling back under 113.30 as Wall Street turned decent gains into losses following the contentious border meeting between Trump, Pelosi and Schumer. The pairing remains relatively buoyant in the bigger picture, following weak Japan GDP revisions on Monday.

    [GBP, USD]
    Cable slumped to fresh trend lows of 1.2494 in N.Y. trade, coming from overnight highs of 1.2639. PM May was meeting EU officials on Tuesday, though overall, it's hard to see what concessions May can obtain that will make any difference in the UK's parliament.

    [USD, CHF]
    EUR-CHF printed new trend lows of 1.1225. The losses reflect Brexit-related angst after UK Prime Minister May postponed the parliamentary vote on the EU Withdrawal Agreement, which generated confusion and increased the perceived risk of a hard, no-deal Brexit scenario. This weighed on both the Pound and the Euro while reviving the Franc's historic role as a safe haven. The SNB conducts its next quarterly policy review this week (Thursday). The central bank has been continuing to tread carefully amid heightened uncertainty about the economic outlook, geopolitical risks and protectionist threats. Recent market volatility and Brexit risks will do little to change the SNBs stance, and we expect the central message to remain that the situation remains fragile and the currency "highly valued." So the SNB widely expected to keep policy unchanged at December meeting while continuing to focus on a negative rate policy and ad hoc currency intervention.

    [USD, CAD]
    USD-CAD is back over the 1.3400 mark, peaking at 1.3424, and up from opening lows under 1.3380. General USD strength has been the major driver today, with the CAD under pressure despite the fairly sharp rally in crude oil prices. Last week's 18-month high of 1.3445 is the next upside target.

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