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By XE Market Analysis January 22, 2018 2:14 pm
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    XE Market Analysis: Asia - Jan 22, 2018

    The dollar was steady in N.Y. morning trade on Monday, as dealers largely sat on their hands ahead of the Senate funding vote. Once it became clear the measure would pass, the greenback rallied modestly across the board. EUR-USD fell from session highs of 1.2260 to 1.2225 before bouncing some, while USD-JPY topped at 111.22 from lows of 110.69 after the open. USD-CAD was steady inside of 1.2435-80, while cable pulled back from trend highs of 1.3970 to 1.3930.

    [EUR, USD]
    EUR-USD was largely been on hold through the morning, with the market awaiting the noon Senate vote in an attempt to re-open the government. The pairing opened at lows of 1.2234, and managed highs of 1.2260. Later, EUR-USD bottomed at 1.2225 as news reports indicated there were enough Senate votes to pass spending legislation, ending the government shutdown. The pair then bounced to 1.2245 highs, with intra day short covering seen behind the modest move higher.

    [USD, JPY]
    USD-JPY printed N.Y. highs of 110.87 in morning trade, up from lows of 110.67, though under Asian session highs of 110.91. The pairing later rallied to intra day highs of 111.22 as the Senate vote vote to refund the government passed. Focus will shift to tomorrow's BoJ policy announcement, where no changes are expected. The markets may have gotten ahead of the BoJ's timeline in terms of discussing normalization, and chief Kuroda is likely to underscore gradualism, which would be consistent with other central banks reassuring that gradual is the watchword this year.

    [GBP, USD]
    Cable logged a peak of 1.3970, a new post-Brexit vote high. The pound had been gaining versus the dollar on concerns about the U.S. government shutdown. News of the Senate vote to refund the government saw profit taking step in, taking cable to 1.3930 lows.

    [USD, CHF]
    EUR-CHF settled in the upper 1.17s, below the 37-month high that was seen last Monday at 1.1833. The pullback follows remarks from some ECB policymakers expressing concerns about the pace of recent euro gains, which could have implications for monetary policy. This has put in a pause on the broad rally the cross has been seeing since mid last year, seen concomitantly with economic recovery in the Eurozone, alongside the apparent passing of the worst of the existential political threats to the Euro area. The SNB's punitive -0.75% deposit rate has also been in the mix of directional drivers. EUR-CHF would need to reach 1.2000 to fully reverse the losses that were seen after the SNB abandoned the franc cap in January 2015.

    [USD, CAD]
    USD-CAD bottomed at 1.2435, coming from North American highs of 1.2478. The move to the lows came as WTI crude briefly rallied over $64.00 folowing news the U.S. Senate voted to end the givernment shutdown. The pairing later rallied back to 1.2471, as oil pulled back. Following the as-expected BoC rate hike last week, we continue to see USD-CAD consolidate on either side of 1.2500.

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