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By XE Market Analysis June 1, 2015 2:17 pm
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    XE Market Analysis: Asia - Jun 01, 2015

    A series of stronger U.S. data got the dollar fired up in N.Y. on Monday, as personal income, manufacturing ISM, and construction spending numbers all beat street expectations. EUR-USD had been trending higher into the N.Y. open, though the pairing topped out at 1.0979, before sliding to 1.0888 lows. Mixed messages on Greece, have kept the market jumpy, and more of the same can be expected near term. USD-JPY meanwhile shot up to new multi-year highs over 124.90, stalling as talk of 125 barrier options emerged. USD-CAD continued to rally in the aftermath of soft Canada GDP last week, and oil prices fading under $60 again, leaving the pairing at 1.2562 highs. Cable traded into 1.5175 after softer U.K PMI data.

    [EUR, USD]
    EUR-USD rallied to N.Y. session highs over 1.0970 early in the session, with the relatively lofty levels supported by soft U.S. consumption data, and perhaps, a glimmer of hope on a Greece deal (not many holding their collective breath just yet, however). The pairing traded over the prior overnight high of 1.0968, though stalled out and turned lower following the strong ISM outcome. The pairing later touched intra day lows of 1.0887, with its eyes on the May 28 base of 1.0867. Option backed offers are reportedly lined up into the 1.1000 mark now, though buy stops may be a factor from 1.1015-20, just above the May 25 high water mark.

    [USD, JPY]
    USD-JPY has continued to add to post-data gains, peaking at nearly 14-year highs of 124.91. Barrier options are reported at 125.00, which appeared to be under defense in late dealings, though stops are likely to be considerable over the figure. Perkier U.S. rates, an improved risk backdrop, and renewed talk of further BoJ stimulus, largely due to soft Japanese data released last week, have all conspired to weigh on the yen. Following comments from finance minister Aso last week however, who fired a rather weak warning shot at a rapidly falling yen, the market should not be surprised to hear more verbal intervention should USD-JPY breach the key 125 mark.

    [GBP, USD]
    After rallying to 1.5272 highs in early N.Y. trade, cable managed to take out the London AM low at 1.5197 amid the latest broad dollar advance, reaching 1.5171 lows before lifting back above 1.5200. The pairing's close under Friday's low at 1.5236 could keep technical pressure on the pound, with the early May low of 1.5089 the next downside target.

    [USD, CHF]
    EUR-CHF dipped back under 1.0330 on Friday, despite EUR-USD's brief recovery over 1.1000. The recent foray above 1.05 stalled shy of the late-April high at 1.0508. SNB's Zurbrugg said last week that negative rates in force for as long as policy requires. This is the new boilerplate rhetoric of Swiss policymakers, who have been in a fight to curtail EUR-CHF's downside, though their options will be limited in context of any broad euro underperformance.

    [USD, CAD]
    The CAD remained under pressure following last week's soft Canada GDP data, as U.S./Canada yield spreads moved further in favor of the greenback. USD-CAD peaked at 1.2563, though staying away from the April 14 high of 1.2570. As the USD rallied broadly however, WTI crude prices slid back over $1.00/bbl, trading under $59.50, after peaking at $60.58 earlier. Another downdraft in oil prices from here, could be enough to send USD-CAD over 1.2570, with the next upside target being 1.2600.

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