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By XE Market Analysis February 11, 2020 3:04 pm
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    XE Market Analysis: Asia - Feb 11, 2020

    The Dollar rallied in early N.Y. trade, later giving back gains to end the session slightly under water. The DXY printed new four-month highs of 98.94, before falling back to 98.72 lows. EUR-USD was pushed under the 1.09 mark for the first time since October, later heading toward 1.1025. USD-JPY rallied to 109.97 early, later fading to 109.75 as Wall Street gave up the bulk of early gains. USD-CAD dipped to 1.3274, from early highs of 1.3314. Cable meanwhile, topped at 1.2968, up from near 1.2930. There was no incoming data on Tuesday. Wednesday's docket is light as well, though January CPI will be released Thursday.

    [EUR, USD]
    EUR-USD printed 1.0892, a new four-plus month low, down from 1.0921 into the N.Y. open. The pairing has now posted six consecutive sessions of lower daily highs and lows, and is within sight of the October two-plus year low of 1.0879. The pairing later bounced to 1.0925 on pre-London close short covering. An outperforming U.S. economy, and virus related safe-haven USD buying should keep pressure on the Euro going forward.

    [USD, JPY]
    USD-JPY managed modest gains since earlier in the session, rallying to intra day highs of 110.96, up from lows of 109.75. Modest risk-on conditions have been mildly supportive so far, but sellers have prevailed from the 110.00 mark for nearly a week now. Uncertainty over coronavirus, despite rallying stock markets can be expected to limit the Yen's downside for the time being.

    [GBP, USD]
    Cable rallied to 1.2968 highs in N.Y. trade, up from opening levels near 1.2925. Incoming U.K. GDP and retail sales data were mixed, though the U.K. managed to avoid a negative growth print, with the flat reading providing some support to the Pound. The BoE's recent refrain from easing and January data showing a release of pent-up business decision making and spending following the December election, have been helping prop up the UK currency. We continue to advice caution, however, as post-Brexit trade negotiations have a long way to go.

    [USD, CHF]
    EUR-CHF made another trend low of 1.0647 in N.Y. trade on Monday. Concerns about contagion of the coronavirus have been affecting market sentiment across the world. With no signs of slowing, and the death toll rising, particularly in China, the Franc's safe-haven status remains in effect. Lows of 1.0627, seen in February of 2017 is the next downside target.

    [USD, CAD]
    USD-CAD gains took a bit of a breather this morning, with the pairing pulling back from the four-month highs of 1.3329 seen on Monday, basing at 1.3274 at mid-session. A modest rebound in oil prices has prompted some light profit taking related selling. WTI crude has traded to highs near $50.70/bbl, up from Monday's $49.42 low. Crude prices will continue to drive USD-CAD direction, while impact on Canada's economy due to the coronavirus outbreak will factor in as well. Canada's finance minister on Monday said there would be “impacts on tourism, impacts on the oil sector and of course impacts on the supply chain”.

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