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By XE Market Analysis December 19, 2014 3:18 pm
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    XE Market Analysis: Asia - Dec 19, 2014

    The dollar firmed up to end the week, while Treasuries and the equity market largely took a breather, and oil prices recovered to $57 on pre-weekend short covering. There was no data to drive the dollar on Friday, though following the post-FOMC wave of risk-on, USD bulls took charge, taking EUR-USD to new 2-plus year lows under 1.2225, and USD-JPY back over 119.50. Cable fell into the 1.5600 region, while USD-CAD found support from cool Canadian CPI data.

    [EUR, USD]
    EUR-USD rallied to intra day highs of 1.2302 moments ahead of the 10:00 EST option expiry, and was then summarily whacked down to 1.2275. Option backed selling was reported. Fresh sellers stepped in at 1.2265, under the prior N.Y. low, which brought the London low, and the 1.2248 trend lows into view. The pairing later fell to new trend lows of 1.2223, taking out the December 8 low of 1.2248. The next downside target will be the July 30, 2009 weekly low of 1.2134. Given the time of year, and the accompanying lack of liquidity, the euro has a fair shot of hitting this target early next week. Especially if the risk backdrop remains buoyed, as it has been since the FOMC announcement on Wednesday.

    [USD, JPY]
    USD-JPY traded comfortably on the 119 handle, after touching 118.84 lows early in the session on reported profit taking interest. The pairing stalled into the December 11 high of 119.55, with further advancement from there likely to be a grind into noted exporter offers in place up to the 120 mark.

    [GBP, USD]
    Cable managed a 1.5675 high into the N.Y. open, getting a lift from EUR-USD advance toward 1.2300. As the dollar generally got a lift through the morning however, cable headed lower, touching 1.5606 into the London close. Light bids emerged into the figure, lifting the pairing over 1.5630 into the close.

    [USD, CHF]
    EUR-CHF spiked toward 1.2100 from the 1.2010 area in early European AM trade on Thursday after the SNB implemented a negative interest rate of -0.25%. The cross edged lower from 1.2045 through the N.Y. session, finding a base into 1.2025.

    [USD, CAD]
    USD-CAD initially rallied to 1.1634 following the offsetting Canadian CPI and retail sales data, which revealed cooler inflation numbers and better than expected sales. The pairing had rallied to intra day highs of 1.1615 going into the data, and after the initial pop, returned back to the 15 level. WTI crude so far finds support under $55, with further gains keeping a lid on USD-CAD through the morning session. Oil touched highs over $57, as USD-CAD flat-lined between 1.1610-30 through the afternoon.

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