Home > XE Currency Blog > XE Market Analysis: Asia - Jul 18, 2013


XE Currency Blog

Topics7368 Posts7413
By XE Market Analysis July 18, 2013 2:04 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 5292
    XE Market Analysis: Asia - Jul 18, 2013

    The dollar firmed in N.Y. trade on Thursday, as better data, and improved risk taking supported. Jobless claims were lower than forecast, while the Philly Fed index was sharply higher. These helped the greenback, and took the S&P 500 and DJIA to record highs. Fed chief Bernanke's get-together with Senate members did not add much new to Wednesday's testimony, so there was little overall market reaction. The issue of a step down in QE asset purchases remains open as policymakers await more data. EUR-USD peaked at 1.3112 early in the session, and subsequently drifted to lows of 1.3067 at the London close. USD-JPY reclaimed the 100 handle early, making its way to 100.65.

    [EUR, USD]
    EUR-USD lacked a clear trend on Thursday. Yesterday's inability to sustain higher levels worked against the topside today and offers were noted towards 1.3130, but a congestion of buyers supported from under 1.3100. The pairing managed lows of 1.3067 before rebounding back over 1.3100 in short covering-driven trade. Good bidding interest was reported at 1.3050, which appeared to have scared some shorts away.

    [USD, JPY]
    USD-JPY offers gave way during Bernanke's Senate appearance. The pairing made its way to 100.65 in N.Y. dealings. Demand for USD-JPY picked up overnight in anticipation of further measures to help the Japanese economy. The Upper House elections are due on Sunday and the LDP are expected to secure a strong majority, which will allow PM Abe to push through more planned growth measures and should be a positive for the Nikkei and in-turn the dollar pairing. The USD-JPY move through 100.50 may generate some momentum overnight on the back of buy stops before heavier offers come into play into 101.00.

    [GBP, USD]
    Cable crossed back under 1.5200 over the N.Y. options cut. Overall, today's session was one of consolidation. U.K. retail sales provided a fillip for Cable out of 1.5160 during the European morning when most short term leverage funds were more interested in buying the dollar over sterling. However, GBP has held on to a large bulk of yesterday's gains and maintains a bullish bias, but it only progressed versus the EUR on the way to 0.8600 versus levels over 0.8700 on Wednesday. Cable is likely to push higher again after a session of consolidation. A move into the 1.5300-30 zone would cause more pain for long-term shorts.

    [USD, CHF]
    CHF is consolidated at easier levels. The modest dollar correction from yesterday's lows saw some hot money flows come out of the swissy and lifted EUR-CHF back to 1.2390. USD-CHF was propped up after it rebounded off the 200-dma on Wednesday and managed to reclaim 0.9400 and build on the recovery today through 0.9475. Direct flows via the cross are still being compromised to a degree by the price chop via Eurozone bond markets.

    [USD, CAD]
    USD-CAD held the 1.0400 level overnight, trading to 1.0439 highs in London. The pairing sat near 1.0420 in early North American trade. Offers were noted from 1.0440, with stops above 1.0450, while bids were in place at 1.0400. A dovish BoC will likely keep CAD gains to a minimum for now, though the firmer risk backdrop ultimately helped the CAD. Oil and gold prices were higher, while U.S. stock indexes posted record highs. USD-CAD eased back under 1.0390 in light afternoon trade. Initial support is seen around 1.0360, while stops are noted at 1.0350.

    Paste link in email or IM