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By XE Market Analysis February 14, 2014 2:27 pm
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    XE Market Analysis: Asia - Feb 14, 2014

    FX trade was quiet on Friday, into a long North American weekend. U.S. data was mixed, with import prices a bit firmer, industrial production softer, and Michigan sentiment slightly better than forecasts. EUR-USD ran up to 1.3714 highs into the open, though struggled to hold the figure through the session. It touched lows of 1.3683 into the London close. USD-JPY was stuck between 101.70 and 102.00 through the session. Equities managed moderate gains, while Treasury yields were steady in narrow ranges.

    [EUR, USD]
    EUR-USD made it above 1.37 in London trade. EUR-USD made a peak of 1.3714, which was a couple of pips shy of the Jan-27 peak. Stronger than expected GDP figures out of France and Germany inspired the rally into the N.Y. open. The U.S. session saw fairly narrow trading bands, as the euro plied its way on either side of 1.3700.

    [USD, JPY]
    The story was similar for USD-JPY, with that pairing locked to a 101.72 to 101.95 trading band. Treasury yields were in a narrow range as well, giving little guidance to the yen. This said, even as risk levels were maintained, USD-JPY made little effort to reclaim the 102 handle. This may be a sign that further downside is in the cards near term.

    [GBP, USD]
    GBP-USD has been a driver of a generally softer dollar environment, surging above 1.6700 on Friday for the first time in nearly three years. EUR-GBP dipped below 0.8200, reflecting the outperformance of sterling. Cable touched 1.6743 highs in N.Y., and held over 1.6725 through the remainder of the session.

    [USD, CHF]
    The CHF traded firmer in recent sessions as equities dipped. EUR-CHF fell to a one-week low of 1.2206. The cross had made a two-week high of 1.2267 earlier in the week as the Swiss currency unwound some of its safe haven premium, reflecting what had been a general recovery in stock markets. The Dec-17 cycle low of 1.2167 is now back in scope. SNB-speak last week affirmed that a removal of the 1.20 limit would only be considered if inflation was much higher had little impact.

    [USD, CAD]
    USD-CAD edged up over 1.0980 from near 1.0950 after the weaker Canadian manufacturing data, and overall, the pairing had been rangebound from the London open. Bids at 1.0950 were noted, with sellers in place from 1.1000 to 1.1030. The more stable risk backdrop this week has been supportive of the CAD, and for now, we look for further modest USD-CAD losses.

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