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By XE Market Analysis July 12, 2018 3:14 pm
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    XE Market Analysis: Asia - Jul 12, 2018

    FX trade was relatively quiet in N.Y. on Thursday, leaving the DXY little changed. Slightly cooler than forecast U.S. CPI dented the greenback a bit early on, though the unit steadied inside narrow ranges after that. EUR-USD remained inside of a 1.1696 to 1.1654 band, while USD-JPY was stuck between 112.37 and 112.58. USD-CAD was supported by oil price weakness, though remained in the mid 1.31s. Cable held over 1.3200 through the session.

    [EUR, USD]
    EUR-USD made an attempt at cracking the 1.17 handle into the London close, though managed a high of 1.1696 before heading back to 1.1670 lows. This morning slightly cooler U.S. inflation headline has underpinned the pairing to a degree, though bigger picture, the market does not appear to be keen on pushing the euro out of its one-month trading band of roughly 1.15 to 1.18.

    [USD, JPY]
    USD-JPY topped at fresh six-month highs of 112.62 into the N.Y. open, and has since idled inside of a narrow 112.58 to 112.37 trading band. Risk-on conditions have supported, as have signs from China and the U.S. that trade negotiations may be in the cards in the coming weeks. In the meantime, fundamentals continue to argue for a higher USD-JPY, as the Fed and BoJ remain on opposing policy paths.

    [GBP, USD]
    Cable bounced into the N.Y. open, topping at 1.3244 and up from 1.3181 lows after the cooler U.S. CPI outcome. Brexit remains front and center. The prime minister, appears to have come through the spate of Brexiteer resignations better than many had thought, with a reshuffled Cabinet, replete with a prominent Brexiteer in the position of Brexit Secretary, suggesting that May's pragmatic Brexit plan has a fighting chance.

    [USD, CHF]
    EUR-CHF rallied to seven week highs of 1.1708. SNB's Maechler said late last month that the franc "remains highly valued" despite the depreciation seen over the last year, arguing that "we are in extraordinary times and we are using unconventional measures." The comments affirm that the SNB is firmly on hold, with Maechler admitting that the SNB's monetary policy room is "necessarily" affected by the actions of ECB and Fed.

    [USD, CAD]
    USD-CAD has pulled back from London highs of 1.3210, bottoming at 1.3150 early in the session. Oil prices have become a focal point for the CAD, now that the BoC has raised rates, as was expected. WTI crude printed a near three-week low of $69.25, and further losses will likely see USD-CAD test Wednesday's high of 1.3218.

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