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By XE Market Analysis February 12, 2014 3:55 pm
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    XE Market Analysis: Asia - Feb 12, 2014

    The dollar rallied versus the euro into the N.Y. open on the back of softer EU production data, and added modestly to gains early in the session. EUR-USD based at 1.3557, just above last Friday's low, before bouncing back toward 1.3600. USD-JPY remained near the top of its recent ranges, though with risk levels near neutral on the day, did not have the impetus to test up toward 103.00. There was no data to drive markets, though Treasury yields edged slightly higher, as Wall Street traversed narrow ranges, on either side of flat.

    [EUR, USD]
    EUR-USD continued its way lower in early trade, making 1.3557 lows early on. The previous low of 1.3552 last Friday will be initial support, with stops noted underneath 50. As was the case on Tuesday, Asian backed buying was noted on the way down, with reserve managers likely behind the interest. The pairing moved back toward 1.3600 in afternoon dealings, as equities faded some.

    [USD, JPY]
    USD-JPY was again unable to break higher, with earlier gains stalling out in concert with the turn-around of Wall Street's fortunes. Solid offers are reported from 102.70 to 103.00, while significant bidding interest is not seen until 102.10.

    [GBP, USD]
    Sterling rallied and Gilt future dropped on the BoE inflation report, which brought a big upward to the central bank's 2014 GDP estimate, to 3.4% from 2.8% previously, though CPI forecasts were revised lower for this year and 2015. The BoE also outlined a new set of forward guidance criteria, with the self-prescribed 7.0% unemployment target now relegated from its prime position, with the focus now shifting to a range of things. Cable opened the N.Y. session near 1.6525 and made its way to 1.6599 into the close.

    [USD, CHF]
    EUR-CHF edged out a two-week high of 1.2260 in N.Y. on Tuesday, its sixth straight session of daily higher highs and higher lows, as the Swiss currency continues to unwind some of its safe haven premium. Better risk levels weighed on CHF following Yellen, as Wall Street scampered higher. The cross had been flirting with 1.2200 amid the backdrop of risk aversion in global markets, though the steadying in stock markets has lent the cross some support.

    [USD, CAD]
    USD-CAD touched 1.1011 lows, off its opening levels near 1.1070. The improved risk backdrop supported the CAD, as Wall Street posted solid gains in the aftermath of Yellen's testimpny. More corporate USD-CAD buying interest was reported at 1.1000, and layered into 1.0970.

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