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By XE Market Analysis January 18, 2019 2:49 pm
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    XE Market Analysis: Asia - Jan 18, 2019

    The Dollar rallied through the morning session in N.Y. on Friday, taking the DXY to two-week highs of 96.39. Gains came following news that China may ramp up purchases of U.S. goods over the next 6-years, with the goal of eliminating the current trade imbalance. EUR-USD dropped to 1.1352 lows from highs near 1.1410, while USD-JPY peaked at 109.89. USD-CAD fell early on warmer Canada CPI, while Cable gave back some recent gains on profit taking, falling to 1.2873 lows.

    [EUR, USD]
    EUR-USD printed two-week lows of 1.1352, down from 1.1410 highs at the open. The pairing headed under its 50-day moving average of 1.1383 earlier in the week, and has posted six-straight sessions of lower daily lows. Concerns over European growth slowing, and a dovish tilting ECB have weighed on the Euro through the week. Next support comes at the January low of 1.1345, with resistance at the 20-day moving average of 1.1426.

    [USD, JPY]
    USD-JPY rallied to near three-week high of 109.89, with gains again coming on the back of risk-on conditions. Wall Street is up sharply on news that China may ramp up imports from the U.S. in order to address the trade imbalance. Japan exporter offers are now reportedly parked from the 110.00 level.

    [GBP, USD]
    Cable drifted back toward to intra day lows of 1.2873 after the London close, correcting some of the gains seen in the wake the UK parliament's rejection of the government's Brexit deal. Cross party talks are aiming to find a Brexit plan capable of winning sufficient parliamentary support, the best chance of which would be a "soft Brexit" Norway-style option. This, along with the raised odds for the March-29 legislated Brexit date being delayed, helped buoy sterling this week, though the UK's future remains clouded by uncertainty.

    [USD, CHF]
    EUR-CHF has settled back over 1.1300 after printing a three-week high at 1.1340 last week. The move was driven by a bout of across-the-board franc selling, which came amid rumors of SNB intervention, which, if this was the case, would look to have been tactically timed to be in concert with the improved risk appetite in global markets. The cross had earlier in the month punched out a four-month low at 1.1184, which was seen as the Swiss currency picked up safe haven demand amid a bout of turmoil in global markets.

    [USD, CAD]
    USD-CAD fell from 1.3270 to 1.3235 following the Canada CPI data, which saw the m/m overall outcome fall less than expected, and y/y rise to 2.0% from 1.7%. The pairing had been on a softer footing since late Thursday, when reports the U.S. may lift tariffs on China circulated, supporting oil prices. The pairing remained near session lows into the close, as crude prices ramped up over $53 on news that China may move to buy more U.S. goods in order to eliminate the trade deficit.

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