Home > XE Currency Blog > XE Market Analysis: Asia - Jan 21, 2014

AD

XE Currency Blog

Topics7443 Posts7488
By XE Market Analysis January 21, 2014 3:33 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 5367
    XE Market Analysis: Asia - Jan 21, 2014

    The dollar weakened some through the morning session, as yields slipped back a touch, and as equities quickly lost their pre-opening gains. There was no U.S. data on tap on Tuesday. EUR-USD started near 1.3530, and made its way to 1.3569 highs. USD-JPY did not fare well either, falling from 104.70 to 104.03 lows. Trade dried up after the London close, perhaps as many in N.Y. closed up shop early to avoid a major snowstorm hitting the region.

    [EUR, USD]
    EUR-USD attempted to rally after running into good bids under 1.3520 early on. The pairing made it up to near 1.3670 in subsequent dealings, reacting to the morning equity market sell-off. The euro continues to be sold into strength however, with a dovish ECB juxtaposed with a likely Fed taper next week. The ECB will likely make a concerted effort to decouple Eurozone yields from U.S. yields as the Eurozone central bank tackles a disinflation problem.

    [USD, JPY]
    USD-JPY has eased to session lows of 104.10, as stocks extend losses, and as yields ease a touch. Bids are reported into the figure, though light stops are noted just underneath, with another layer of buyers seen at 103.70. The pairing eventually managed a rebound over 104.25, as stocks regained some poise.

    [GBP, USD]
    GBP popped higher against the USD and EUR, with a chuck of sell orders in EUR-GBP initiating the broader run higher that the pound has seen. EUR-GBP dipped through the Jan-10 low of 0.8230 and extended to 0.8214, which is the lowest level seen sine January last year. Sterling buy orders were triggered through 0.8225. Cable rose to an eight-day peak of 1.6486, which brings the cluster of early January highs in the 1.6500-1.6517 range into scope.

    [USD, CHF]
    EUR-CHF has consolidated gains above 1.2300 after recovering from the Dec-17 low of 1.2166. Price action has been pretty choppy over the last couple of weeks, 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 traded up toward 1.1020 multi-year highs in London dealings, extinguishing barrier options at 1.1000 in the process. Fund account selling was noted early in the North American session, resulting in a move back under 1.0970, though general profit taking on a broadly softer USD weighed as well. Bids are now reported into the 1.0950 region, and buy the dip mentality remains in effect for now. This said, overnight profit taking could be a factor into Wednesday's BoC announcement.

    Paste link in email or IM