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By XE Market Analysis January 12, 2015 2:22 pm
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    XE Market Analysis: Asia - Jan 12, 2015

    The dollar was mostly lower in N.Y. trade on Monday, as a risk off day developed on the back of yet another oil price melt down. Stocks headed lower, as did Treasury yields, lifting the USD over 1.1840 versus the euro, and under 118.20 against the yen. There was no U.S. data to move markets. Elsewhere, USD-CAD logged new five-year highs over 1.1940, as WTI crude traded down briefly to the $45 handle. Cable bounced off the 1.5100 level, peaking near 1.5175.

    [EUR, USD]
    EUR-USD traded back over 1.1820, after touching 1.1787 N.Y. session lows early on. Oil price erosion again weighed on equities, helping to support the euro. Initial resistance was seen at 1.1825-50, and the pairing managed 1.1844 highs. The euro remains in sell the rally mode, though as long as risk levels remain depressed, fresh EUR-USD losses may be hard to come by.

    [USD, JPY]
    USD-JPY held above the overnight low of 118.09, basing at 118.22 before rallying back over 118.65. The partial recovery on wall Street provided some support, with major indices paring their losses by about half. USD-JPY moved briefly under its 50-day moving average of near 118.20 for the first time since October in Asian trade, though further downside could be in the cards should it close under the level.

    [GBP, USD]
    Cable found a footing around 1.5100 after dipping quite sharply during the early part of the London session. A high of 1.5193 had been seen in the early Asia-Pacific session. News that UK pharmaceutical company Shire is buying U.S. NPS Pharmaceuticals for $5.2bln weighed on Cable. The pound recovered in N.Y. trade, as the dollar suffered more broadly on the back of another risk off session, making its way over 1.5180 into the close.

    [USD, CHF]
    EUR-CHF has come under fresh pressure in recent days, once again amid general euro weakness, and has logged a low of 1.2007 today. Swiss foreign currency reserves data for December, out today, show reserves rose to CHF 495.1 bln (a record) from CHF 462.7 bln in November, confirming the SNB's intervention on Dec-18. The intervention was additional to the implementation of a negative deposit rate, which was cut to -0.25%, also on Dec-18. The rouble crisis and euro weakness saw EUR-CHF come under pressure in December, and on Dec-16 the cross came within six pips of SNB's the 1.2000 limit. The cross spiked to 1.2096 on Dec-18 on the intervention and the announcement of the negative deposit rate. This was the first time that the SNB has intervened in spot since 2012. With the ECB set to pursue QE, the SNB will have its work cut out to defend 1.2000 during the first half of 2015.

    [USD, CAD]
    USD-CAD traded over 1.1900, making 1.1909 highs in tandem with WTI crude falling to new trend lows of $46.69. The May, 2009 high of 1.1953 is the next major upside target, though good selling interest was seen initially on the brief move over 1.1900. The pairing later continued its climb, peaking so far at 1.1956, meeting its target, as WTI crude dove nearly 5%, crossing under $46/bbl, touching a $45.96 low.

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