Home > XE Currency Blog > XE Market Analysis: Asia - Dec 14, 2017


XE Currency Blog

Topics5493 Posts5538
By XE Market Analysis December 14, 2017 2:27 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 3689
    XE Market Analysis: Asia - Dec 14, 2017

    The dollar was mixed in N.Y. trade on Thursday, buoyed early by solid U.S. retail sales figures, and a dovish ECB presser. EUR-USD topped at 1.1862 early, before fading to 1.1772 lows. USD-JPY held over 112.50 until Wall Street faltered, then dipped to 112.09 lows. USD-CAD remained firm until BoC chief Poloz talked upbeat about the Canadian economy. That pairing fell from 1.2855 to 1.2714 lows. Cable recovered from sub-1.34 levels, leaking at 1.3442.

    [EUR, USD]
    EUR-USD gave back early gains to 1.1862, and then some, falling back to intra day lows of 1.1772. The pairing was initially bid up following the ECB's upgraded economic growth projections, though with EU inflation still cool, and with no signs the bank central bank is ready to put an end to its easing cycle, EUR bears have won the day. EUR-USD support now comes in at the 50-day moving average of 1.1761, then at 1.1730-15, representing Tuesday and Wednesday lows.

    [USD, JPY]
    USD-JPY printed six-session lows of 112.41, after failing to trade above its 50-day moving average at 112.87 earlier. Wall Street has given back its gains, putting pressure on the pairing, while a less hawkish sounding Fed may result in further profit taking related selling. Under 112.00, the 200-day moving average at 111.65 is the next support level.

    [GBP, USD]
    Cable dove nearly 40 pips on the BoE guidance, later logging a low of 1.3292. The pair has since settled around 1.3440, which is a big figure up on levels that were prevailing just ahead of the U.S. CPI data released yesterday. The BoE left monetary policy unchanged by unanimous votes at the nine-member MPC, as had been widely anticipated, but noted that domestic activity indicators "suggest GDP growth in Q4 might be slightly softer than in Q3" while dismissing the recent spike in CPI above 3%, which is seen "likely to be close to its peak" and "will decline towards the 2% target in the medium term."

    [USD, CHF]
    EUR-CHF has seen volatile price action over the last couple of weeks, having turned lower after several attempts above 1.1700. There have been multiple failures to sustain gains above 1.1700 over the last month, and market participants will be wary of supply above this level. We still remain bullish over the medium term, however, assuming the SNB remains anchored to ultra-accommodative monetary policy, which looks likely to be the case for the foreseeable future (the central banks meets on policy on Thursday).

    [USD, CAD]
    USD-CAD bottomed at 1.2800 in Asia, since making its way to 1.2866 highs in London, following a bearish IEA oil market report. Oil prices firmed up from lows, which will limit USD-CAD upside. The pairing later turned lower after BoC Governor Poloz's prepared speech, dropping to 1.2792 from North American highs of 1.2855. The governor painted a mostly bright Canadian economic picture, prompting some USD-CAD profit taking.

    Paste link in email or IM