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By XE Market Analysis February 26, 2019 3:12 pm
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    XE Market Analysis: Asia - Feb 26, 2019

    The Dollar eased in N.Y. on Tuesday, taking the DXY to 95.97 lows, from highs of 96.46. Mixed U.S. data had an impact on the Greenback, with weak housing starts weighing on the USD, and stronger consumer confidence supporting. Fed chair Powell revealed no surprises in his congressional testimony, making it clear the Fed was on hold, and awaiting incoming data. Wall Street was narrowly mixed, while Treasury yields were a touch lower. EUR-USD bottomed at 1.1345, later rallying to 1.1380 highs. USD-JPY was range bound, touching 110.70 lows, and 110.89 highs. USD-CAD slipped from 1.3235 highs to 1.3173, as Oil prices firmed up again. Cable meanwhile, printed five-month highs of 1.3283 on the easing of Brexit fears.

    [EUR, USD]
    EUR-USD eased back from session highs of 1.1367, falling to 1.1337. The pairing has continued to flirt with its 20-day moving average, currently at 1.1356 over the past week, though has not closed over the level during that period, indicating a technically weak outlook. The stronger U.S. economy, relative to Europe, along with a permanently dovish ECB should continue to keep EUR-USD in sell-the-rally mode.

    [USD, JPY]
    USD-JPY fell to 110.67 lows following the weak housing starts data earlier, coming from opening highs of near 110.90. Risk-off conditions, along with reports of Japan fiscal year-end Yen repatriation flows have kept a lid on the pairing. Focus shifted to Fed chair Powell's congressional testimony which was pretty much a non-event, as he offered up little new on the policy front.

    [GBP, USD]
    Cable rallied to five month highs of 1.3283 in the wake of the British Prime Minister May's statement before parliament. Following what proved to be accurate reports of her pivot to putting an option for a Brexit delay on the table, there had been talk that she would back down from the threat of a no deal Brexit. But instead, with all the amplification that the political theater that the House of Commons puts on, she expressly said that a no deal scenario remained one of three choices -- to leave with a deal, to leave without a deal or to revoke Article 50 and remain in the EU.

    [USD, CHF]
    EUR-CHF rallied to 1.1389 in N.Y. on Monday, a two-week high, and above its 20-day moving average. The move came in tandem with EUR-USD's rise to three-week highs just over 1.1400. The price action has continued a phase of relatively high volatility that the cross has been experiencing. Since early January there have been several bouts of pronounced under performance in the Swiss franc, often accompanied by talk/suspicions of SNB intervention. SNB vice president, Zurbruegg, said last month that the franc "remains highly valued" and the situation on foreign currency markets is "still fragile" and that the SNB's two pillar strategy of negative interest rates and ad-hoc currency interventions, or threat thereof, "remains appropriate."

    [USD, CAD]
    USD-CAD rallied to intra day highs of 1.3227, continuing its climb seen on Monday following the sharp sell off in WTI oil prices. Crude recovered modestly this morning, though remains over $2/bbl lower than Friday's three-month high of $57.81. USD-CAD later eased to 1.3173 lows. Focus will shift to Canada January CPI, due on Wednesday, where an expected y/y dip to 1.3% from 2.0% may weigh further on the CAD.

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