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By XE Market Analysis December 14, 2018 3:30 pm
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    XE Market Analysis: Asia - Dec 14, 2018

    The Dollar index pulled back from 18-month highs it posted early in the session, dipping to 97.43 from 97.71 highs. Incoming U.S. data was decent, with retail sales coming in as-expected, with upside prior month revisions. Industrial production was netter than expected, though revised down from prior months. Wall Street was slammed on China slowdown concerns, which appeared to have weighed on the Greenback going into the weekend.

    [EUR, USD]
    EUR-USD bottomed at near three-week lows of 1.1270, with losses coming on the back of exceptionally weak EU and individual country flash PMI readings. The November 28 bottom of 1.1264 is the next downside target, with a break there taking the pairing to one-month low territory.

    [USD, JPY]
    USD-JPY bottomed at 113.30, a point above Thursday's low, and down from morning highs of 113.68, which came on the heels of the decent U.S. retail sales report. The risk-sensitive pairing moved lower with Wall Street. Sell-stops are noted under 113.00 now, though there does not appear to be much selling conviction going into the weekend.

    [GBP, USD]
    Cable bottomed at 1.2530 before finding a footing in N.Y. on Friday. UK Prime Minister is still plugging away in her diplomatic effort to sweeten the Brexit deal, but it's "crystal clear" -- in the words of European Commission President Juncker -- that there won't be any negotiation by the EU, other than a clarification of the deal on offer. This suggest that the Withdrawal Agreement from the EU is headed for eventual failure in the UK Parliament. We anticipate that the Pound with remain a sell-into-gains into the Parliamentary vote, which will be in January.

    [USD, CHF]
    EUR-CHF continues to hold slightly under the 1.1300 mark after the SNB confirmed its policy setting which relies on the combination of negative interest rates and the threat of ad hoc FX intervention to keep the "highly valued" franc under control and "fragile" currency markets. Ongoing Brexit uncertainty and other political risks in Europe and on the global stage as well as protectionist tendencies will likely keep the SNB in wait and see mode for a long time to come.

    [USD, CAD]
    USD-CAD remained near the top of its intra day trading band, topping at 1.3402 in London morning trade, before basing at 1.3369 at mid-morning. WTI crude prices are down 2.5% on the session, touching $51.01 lows, which has supported the pairing, as has the general risk-off backdrop. Resistance comes at last week's 18-month high of 1.3445, with support now at 1.3338, Thursday's low.

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