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By XE Market Analysis July 20, 2018 3:24 pm
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    XE Market Analysis: Asia - Jul 20, 2018

    The Dollar was fairly steady in the London morning session, but that changed in a hurry following a Trump tweet again talking down rates and the dollar, accusing China and the EU of currency manipulation. The Greenback then tumbled broadly, taking EUR-USD to 1.1738 highs from pre-open levels of 1.1650. USD-JPY fell from near 112.50 to 111.41 lows into the close. USD-CAD pulled back under 1.3120 following solid Canada data. The pound rallied to 1.3140. close.

    [EUR, USD]
    EUR-USD topped at 1.1723 early in the session, printing four-day high in the process. The pairing had shot higher on Trumps's Tweet "China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollar gets stronger and stronger with each passing day - taking away our big competitive edge. As usual, not a level playing field." The Euro has since steadied over 1.1700.

    [USD, JPY]
    USD-JPY has stayed down following Trump's Tweet storm early in the session, as he attempted to talk down interest rates and the dollar. In addition, Trump talked of turning up the China trade tariff dial to the tune of $500 bln in goods. USD-JPY fell from near 112.45 into the open, to a better than one-week low of 111.57. The pairing since has managed only a bounce to 111.91.

    [GBP, USD]
    The Pound managed to find a footing following a three straight day run lower. Cable was the biggest mover, reflecting concurrent weakness in the Dollar, with the pair posting a three-day high of 1.3140 to put some further distance in from yesterday's 10-month low at 1.2957. Cable still remains down by 1.1% on the week-on-week comparison. BoE MPC member Tenreyro said earlier that recent economic data have shown that economic weakness in Q1 was just a weather-related soft patch, though she refused to give away any more than that with regard to how she might vote at the upcoming August MPC meeting, noting that she will be watching incoming data closely.

    [USD, CHF]
    EUR-CHF has settled back in the mid 1.1600s, down from the eight-week high seen earlier in the week at 1.1714. 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 for manoeuvre is "necessarily" affected by the actions of ECB and Fed.

    [USD, CAD]
    USD-CAD tumbled to 1.3127 lows from 1.3215 following the warmer Canada CPI and strong retail sales outcomes. September crude futures largely remained over the $68 level, also pressuring the pairing to a degree. Tuesday's 1.3108 low is the next support level.

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