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By XE Market Analysis February 16, 2017 2:53 pm
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    XE Market Analysis: Asia - Feb 16, 2017

    Position squaring again weighed on the dollar in N.Y. Trade on Thursday, leaving EUR-USD at one-week highs of 1.0679, and USD-JPY at one-week lows of 113.13. Incoming U.S. Data was decent, with jobless claims lower than forecast, and the Philly Fed index much higher than expected. Wall Street posted moderate losses, while yields edged lower. Elsewhere, USD-CAD printed two-week lows of 1.3010 as oil prices steadied near $53, while cable was range bound on either side of 1.2500.

    [EUR, USD]
    EUR-USD has rallied to one-week highs of 1.0678. The pairing found support at 1.0600 in London, just above the 50-day moving average at 1.0595, and now looks poised to test the 20-day moving average, which is currently at 1.0700. Following two-weeks of losses, it appears position squaring, which kicked off after Wednesday's post CPI drop, is set to continue.

    [USD, JPY]
    USD-JPY faded to 113.10 lows as stocks pulled back some, and as yields eased lower. The pairing has sold off from the three week highs near 115 seen on Wednesday, with solid offers at the level prompting a round of profit taking. USD-JPY had come from near 111.50 as recently as last week.

    [GBP, USD]
    Cable settled back under 1.2500 after failing to sustain gains above here during the day. The pair has lost its link with EUR-USD, as EUR-GBP has tracked higher, and GBP-JPY lower. On the week, sterling is trading at near net unchanged levels versus the dollar and euro, and 0.5% for the better in the case against the yen.

    [USD, CHF]
    EUR-CHF has traded heavily so far this week, settling in the mid 1.06s. Last week's eight-month low at 1.0632 is back in range. The weakness of the cross stems from rising political risks in France into the April Presidential election. The Swiss franc was little-affected by the latest volley of SNB-speak last Monday, with president Jordan saying that negative interest rates are "indispensable" in capping an overvalued currency, while and his colleague Maechler argued that there would be "heavy consequences" of an even stronger franc for the Swiss economy and pension funds. The franc's strength against the euro, which is a good proxy of the broader trade-weighted value of the Swiss currency, evidently remains an ongoing concern for Swiss policymakers. At least the franc is one currency unlikely to attract a Trump accusation of being undervalued.

    [USD, CAD]
    USD-CAD was range bound through the Wednesday session, topping at 1.3120 following the hotter U.S. CPI outcome, and basing at 1.3069 after the London close, as the USD overall lost ground. Sellers stepped in at the highs, likely with the 20-day moving average in mind, which currently sits at 1.3123. WTI crude prices have steadied at $53.00, which supported the CAD to a degree as well.

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