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By XE Market Analysis February 13, 2020 2:37 pm
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    XE Market Analysis: Asia - Feb 13, 2020

    The Dollar was mostly higher in N.Y. on Thursday, with in-line CPI and lower than expected jobless claims driving the DXY to fresh four-month highs. Risk-off conditions helped the USD as well, following news overnight that the number of China virus case was revised sharply higher, with safe-haven flows supporting. Wall Street struggled though manage to cut losses later in the session. Treasury yields moved lower. EUR-USD printed new 33-month lows of 1.0834 from 1.0870 at the open. USD-JPY recovered from 107.65 lows, peaking over 109.85 as stocks recovered. USD-CAD moved marginally higher from its low of 1.3238. Cable meanwhile, headed up toward 1.3070 before steadying.

    [EUR, USD]
    EUR-USD posted its eighth-straight lower daily low in N.Y. trade on Thursday, with the pairing touching fresh 33-month lows of 1.0834. In-line U.S. CPI and lower weekly jobless claims kept the market theme of a relatively stronger economy alive, which has been driving the Dollar higher so far this year. That plus demand for safe-haven Treasuries, largely due to the coronavirus, has seen the DXY rally to four-month highs over 99.00 from lows since 96.40 at the start of the year.

    [USD, JPY]
    USD-JPY has been rangebound in N.Y. trade, managing just a 109.86 to 109.65 trading band. Upside potential remains difficult given the risk-off conditions today, prompted by renewed coronavirus concerns following the spike in new cases reported from China overnight. Monday's 109.56 low is support, with the 110.00 level marking resistance.

    [GBP, USD]
    Cable rallied to seven-session highs of 1.3069 from pre-open lows of 1.2974. The unexpected news that Chancellor of the Exchequer Sajid Javid resigned, to be replaced by Rishi Sunak, boosted sterling. The change is part of a post-election cabinet reshuffle, widely seen as a power shift in favour of the prime minister, that will suit his ambitious plans for a fiscally expansive policy to finance major infrastructure projects. PM Johnson announced big plans for infrastructure projects earlier in the week, and with the new Chancellor in place, markets are anticipating the government's 2020-21 budget, to be detailed in March, to show a significant fiscal expansion.

    [USD, CHF]
    EUR-CHF once again fell further into major-trend low territory, printing a low at 1.0608, the lowest level seen since August 2015. The pronounced losses the cross has been seeing are partly a product of safe-haven demand for the franc, and partly as a lasting consequence of the surprising decision by the U.S. to add Switzerland to its list of currency manipulators last month.

    [USD, CAD]
    USD-CAD was rangebound overnight, staying inside of Wednesday's range, above the eight-session low of 1.3235, and below the 1.3296 top. Risk-off conditions kept pressure on the pairing, though this was offset some by a tentative oil price rally. WTI crude was up over $1/bbl from overnight lows near $50.60. The 200-day moving average at 1.3219 provides support now, with resistance now at 1.3300.

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