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By XE Market Analysis January 14, 2014 2:12 pm
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    XE Market Analysis: Asia - Jan 14, 2014

    FX trade was fairly quiet in N.Y. on Tuesday, with the greenback mixed overall. The greenback lost modest ground to the European majors, while gaining against the yen and dollar bloc. U.S. economic data was better, with ex-auto retail sales beating forecasts, and import prices very tame. EUR-USD opened near 1.3670, put in a 1.3658 base, and later peaked at 1.3690. USD-JPY started near 103.60, before touching the 104.00 mark. Equities took back a chunk of Monday's losses, as Treasury yields moved marginally higher.

    [EUR, USD]
    EUR-USD bounced in London trade, with the move sparked by an optimistic prognosis of the Eurozone economy by ECB's Nowotny. After coming up just shy of 1.3700, the pairing opened the N.Y. session near 1.3670, and spent the remainder between 1.3655 and 1.3690, in uninspiring trade.

    [USD, JPY]
    USD-JPY opened near 103.60, and eventually made its way to 104.00 highs. The pairing rallied on the back of improved U.S. data, slightly firmer Treasury yields, and a more supportive risk backdrop. There were no major flows reported, though Japanese offers (exporters) were again lying in wait at the 104.00 level. There was hardly any pullback from the peak however, implying offers could be raised in Tokyo tonight.

    [GBP, USD]
    We remain sterling bullish, though the 1.6500-1.6510 zone in Cable is a strong resistance point. This said, cable reversed sharply lower through the session on Monday, touching lows under 1.6350 before stabilizing. The pairing had nudged to just under 1.65 in Asia, before being hit with another round of profit taking following softer U.K. production and retail sales data.

    [USD, CHF]
    The CHF has seen some choppy price action in recent sessions, but overall we expect the currency to remain on a bigger-picture softer footing as a consequence of the unwinding in the Swiss currency's safe haven premium as the period of Fed policy uncertainty ended with its decision to commence QE tapering. Resistance comes in at 1.2400, support at 1.2320 and 1.2300.

    [USD, CAD]
    USD-CAD touched 1.0948 highs, after opening the session near 1.0885. The pairing advanced despite firmer oil prices, and a generally better risk backdrop. Corporate buying apparently put a solid floor under the pairing, with buying reported overnight under the figure. Stops were noted from 1.0950, just over the January 10 peak, with a move above there bringing fresh multi-year highs into effect. Stops were spared however, as USD-CAD eased back into 1.0930 in light afternoon trade.

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