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By XE Market Analysis February 9, 2015 2:36 pm
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    XE Market Analysis: Asia - Feb 09, 2015

    The dollar attempted to rally in early N.Y. dealings on Monday, though ultimately struggled, as equities and yields stayed down. There was no data to move the markets, though higher oil prices supported the CAD and AUD through the session. EUR-USD fell to 1.1271 lows early in the session, though found support ahead of 1.1262, which represented the January 29 low. Greece remains an issue, which limited gains to the 1.1447 level. USD-JPY traded a narrow range, dipping under 118.50 as equities fell, then fighting its way back over 118.70 as Wall Street pared losses.

    [EUR, USD]
    EUR-USD touched 1.1271 lows early in the session, where buyers emerged ahead of the January 29 base of 1.1262. The pairing then traded up to 1.1347 highs, with short covering cited. Uncertainty over Greece remains an anchor on the euro however, and without fresh positive leads from EU/Greece negotiations, upside from here should be limited. The pairing idled between 1.1445 and 1.1415 through the remainder of the session.

    [USD, JPY]
    USD-JPY found support under 118.50 early in the session, and rallied to 118.77 highs on not as bad as expected Wall Street performance after the open. Equities cut some losses later in the session, allowing the dollar to rally back over 118.70. Trade was quiet through the afternoon, with a 118.55-75 range holding.

    [GBP, USD]
    Cable is entrenched in the mid-to-low 1.52s following Friday's solid U.S. jobs report, though sterling is faring better against the euro, with EUR-GBP looking set for a test of the Jan-26 low at 0.7406. We expect sterling to hold up against the euro after solid patch of UK data, highlighted by the January PMI surveys that showed all three sectors (manufacturing, construction and services) beating expectations, mostly reversing unexpected weakness in December and pointing to encouraging growth momentum in Q1. Cable peaked at 1.5244 in N.Y., and found support into 1.5210.

    [USD, CHF]
    EUR-CHF is trading lower, back near 1.05 amid a generally softer euro. SNB's Jordan said over the weekend that the central bank is prepared to intervene in EUR-CHF if necessary, that, "We are observing the exchange rate situation as a whole ... If necessary we are active," but, " ... we do not speak about our transactions." He said that the franc remains "clearly overvalued" at around 1.0500, but said refrained to comment on what it considers the preferred franc levels or what it sees as a fair value. An "informed source" of the Tages Anzeiger newspaper last week said that the SNB is initiating a "soft floor" in EUR-CHF at 1.05-1.10. SNB's vice-chairman Danthine in late January that the SNB was still "fundamentally prepared to intervene in the foreign exchange market," and that Singapore's SGD basket policy "deserved closer examination." The SNB was widely reported to have intervened last Thursday from levels near 1.0500.

    [USD, CAD]
    USD-CAD touched intra day lows of 1.2481 into the North American open, before heading back over 1.2500. The pairing found finding sellers over the figure, with domestic interest seen early on. Oil prices advanced, with WTI trading over the $53 level again. The oil rally, along with pared equity market losses eventually saw USD-CAD slide to 1.2431 lows. Last Friday's 1.2394 base is the next support level.

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