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By XE Market Analysis January 15, 2015 2:27 pm
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    XE Market Analysis: Asia - Jan 15, 2015

    The shock from the SNB's decision to abandon its EUR-CHF floor had repercussions in N.Y. on Thursday, leading to widespread volatility across all markets. U.S. equities swung between positive and negative territory ahead of the open, rallies in early trade, then slumped once again. The dollar picked up ground against the euro, taking EUR-USD briefly to new 11-year lows of 1.1568. USD-CHF mounted a rally from 0.8700 to over 0.9130, before falling back to 0.8750, as EUR-CHF vaulted from 1.0170 to highs of 1.0600, before diving back under 1.0175. USD-CAD was pushed and pulled as well, falling to 1.1804 lows into the open, before popping to 1.1953 highs. WTI oil prices moved up to $51.23 from $48 into the open, though quickly fell back under $47. On the economic front, weekly jobless claims were higher than forecast, while core PPIP surprised to the upside. Both the N.Y., and Philly Fed indices were soft.

    [EUR, USD]
    EUR-USD slipped back under 1.1600, falling from N.Y. highs over 1.1745. The overnight trend low of 1.1575 was in the cross hairs, though stops tripped under the level resulted in follow through only to the 1.1568 mark. The pairing picked up to 1.1636 highs from there, though ahead of what is now thought to ba a "massive" round of ECB QE next week, euro gains will be tentative. The next downside target comes in at 1.1523, which was the close on November 11, 2003.

    [USD, JPY]
    USD-JPY was the odd man out for the most part through the N.Y. session, trading inside a relatively narrow range of 116.35 and 117.20 through most of the day. Most FX market focus has been on the EUR and CHF following the wild swings seen since the SNB move to abandon its EUR-CHF peg. USD-JPY gains have been capped by the ongoing tentative risk backdrop, though downside should be limited, as in the bigger picture, the potential for more Japan stimulus remains on the radar screen.

    [GBP, USD]
    Sterling has traded mixed today, having soared to near six-year highs against the euro, which had the SNB's supporting rug dramatically pulled from under its feet earlier, while ebbing toward yesterday's lows against the dollar. We remain bearish of Cable, despite BoE MPC members' efforts to downplay the dive in UK December CPI to 0.5% y/y. Cable support is marked at 1.5145-55, resistance at 1.5268-70 and 1.5300. The nearest moving average of note is the 20-day average at 1.5376.

    [USD, CHF]
    EUR-CHF climbed over 1.0320, up from N.Y. session lows of 1.0170. A significant move in itself, but a drop in the bucket compared to overnight action. The dollar outperformed versus the CHF over EUR-USD, as USD-CHF rallied to 0.8865 from N.Y. lows of 0.8700, as EUR-USD fell into 1.1630, from 1.1715 N.Y. highs. The action wasn't done yet however, as rumors were heard that the SNB had been buying EUR-CHF, as the cross ramped up to near 1.0600, up nearly 300 points in 15 minutes. USD-CHF meanwhile, rallied over 0.9100, from 0.8900 over the same time period. We suspect the rumors were just that, though following the shock and awe from the Bank overnight, some were saying anything is possible. The cross later settled in near 1.0300, while USD-CHF fell back under 0.8900.

    [USD, CAD]
    USD-CAD was all over the map overnight, trading between 1.1995 and 1.1803 into the North American open. Since then, the sharp, but brief oil rally kept the pairing down, though with WTI falling back nearly $5 from highs, USD-CAD rallied back over 1.1940. Volatility reigned in all markets, and USD-CAD was no exception.

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