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By XE Market Analysis January 23, 2018 3:16 pm
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    XE Market Analysis: Asia - Jan 23, 2018

    The dollar came under renewed pressure in N.Y. on Tuesday, with the DXY hitting a three-plus year low of 90.07. EUR-USD topped at 1.2306 after opening near 1.2235, while USD-JPY touched 110.26, after peaking at 111.17 post-BoJ meeting. USD-CAD traded a narrow range in the mid-1.24s, while cable printed new post-Brexit vote highs of 1.4027.

    [EUR, USD]
    EUR-USD topped at 1.2306, climbing to a one-week high as dollar woes continue. A much stronger than anticipated German ZEW survey, which will add to the arguments of the hawks at Thursday's council meeting, got the euro ball rolling earlier. The pairing will now likely consolidate into Thursday's ECB meeting, where eyes will be on Draghi for signs of a guidance shift.

    [USD, JPY]
    USD-JPY printed one-week lows of 110.26, losing its post-BoJ bid, even as Kuroda sounded a dovish tone on policy. The dollar is weaker across the board going into the London close, taking the DXY to three-plus year lows of 90.07, and keeping pressure on USD-JPY. Support comes in at 110.20, last week's bottom.

    [GBP, USD]
    Cable printed fresh post-Brexit vote highs of 1.4027 into the London close, with the move higher largely driven by dollar weakness. The DXY hit three-plus year lows in N.Y. trade. Wednesday brings November U.K. employment data.

    [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 rallied to 1.2491 highs in London, finding support above 1.2460 into late morning. The pairing later slipped to 1.2431 as oil prices rallied. News that the U.S. would impose tariffs on imported washing machines and solar panels (primarily impacting China and South Korea) has indirectly provided some support to the pairing, bringing home the potential for U.S./Canada trade difficulties, as NAFTA talks continue in Montreal this week. USD-CAD has been in consolidative mode since the BoC rate hike last week. Resistance comes at the 20-day moving average which stands at 1.2498, with support seen at Monday's low of 1.2436.

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