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By XE Market Analysis January 29, 2015 3:19 pm
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    XE Market Analysis: Asia - Jan 29, 2015

    The dollar rallied broadly in N.Y. trade on Thursday, though it was the commodity bloc that was hit the hardest. Oil and copper prices hit new trend lows, which saw USD-CAD rally to multi-year highs of 1.2650, and AUD-USD sink to multi-year lows under 0.7240. USD-JPY moved up to near 118.50 on relatively stable yields and a moderate Wall Street Rally. EUR-USD gave back the 1.13 handle, touching 1.1279 lows, as cable skidded along just above 1.5020. On the economic front, weekly jobless claims fell to trend lows, though pending home sales missed the mark.

    [EUR, USD]
    EUR-USD moved lower after the sharp drop in jobless claims, taking it under 1.1305 from 1.1320. Buyers emerged ahead of the figure however, and the pairing bounced to 1.1367 highs by mid-morning. As equities recovered, the euro took another crack at sub-1.13, eventually posting 1.1279 lows. EUR-USD recovered back over 1.1310 in light afternoon dealings.

    [USD, JPY]
    USD-JPY has managed to hold near its highs of 118.48. as Wall Street attempts a recovery, and as yields stabilize to a degree. The pairing has traded inside of 117.20 and 118.80 for over a week now, centered on the 118.00 mark, with more of the same likely in the near term. Risk taking levels will need to pick up if an upside breakout is to occur, though U.S. equity market sentiment remains decidedly unclear for now.

    [GBP, USD]
    Cable was on the decline into the N.Y. open, though selling picked up speed once the 1.5100 mark again gave way. The pairing stabilized under 1.5050 through the afternoon, briefly edging under 1.5020 before settling near 50. Cable has struggled over 1.5200 of late, and another run at trend lows of 1.4950 appears the most likely outcome going forward.

    [USD, CHF]
    EUR-CHF posted highs of 1.0465 on Thursday, which was the best level seen since the SNB abandoned the peg at 1.2000 on Jan-15. The market remains illiquid and whippy. SNB's Danthine on Tuesday said that the SNB was still "fundamentally prepared to intervene in the foreign exchange market," and that Singapore's SGD basket policy "deserved closer examination." He also confirmed that the prospect of ECB bond buying was seen as a key risk factor when deciding to abandon the franc cap. He still sees the franc as overvalued, but didn't mention what would be an appropriate level.

    [USD, CAD]
    USD-CAD traded over 1.2550, after making new highs of 1.2562 in London dealings earlier. As oil sticks close to its trend low, and the market ponders further BoC rate cuts, the CAD looks set to remain under pressure. The pairing later soared to 1.2677 highs after tripping reported stops at 1.2600. Buying stepped in on the move above 1.2585, resulting in a quick move over the figure. The latest downdraft in oil prices was the driver, as WTI crude fell to $43.56/bbl lows.

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