Home > XE Currency Blog > XE Market Analysis: Asia - Jun 05, 2017


XE Currency Blog

Topics5257 Posts5302
By XE Market Analysis June 5, 2017 3:03 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 3526
    XE Market Analysis: Asia - Jun 05, 2017

    The FX market was quiet in N.Y. trade on Monday, leaving major dollar pairings largely inside of narrow ranges. Incoming U.S. data was mixed, with factory orders softer than expected, and services ISM about in line with forecasts. EUR-USD ranged between 1.1235 and 1.1264, as USD-JPY was stuck inside of 110.26 to 110.68. USD-CAD topped just over 1.3500 on soft oil prices, while cable reclaimed the 1.2900 handle on a Tory friendly election poll.

    [EUR, USD]
    EUR-USD has been relatively steady through the N.Y. session, and aside from an early dip to 1.1235, has traded inside of 1.1243 and 1.1255 through the morning. Positioning ahead of Thursday's ECB meeting, where the Bank is expected to acknowledge the improved growth outlook and finally remove the easing bias, can be expected going forward, with the 1.1250 level likely to mark the middle of the range until then.

    [USD, JPY]
    USD-JPY has been range bound through the session, though remains near session lows of 110.39 and the one-month overnight Asian low of 110.31. The pairing continues to hold above its 200-day moving average at 110.28, though the soft risk backdrop, and lack of any real bounce today has us looking for further downside potential. Risk events this week include the U.K. elections, the ECB meeting, and in the U.S., the Congressional testimony of former FBI director Comey, who will be speaking on Russian influence in the U.S. election last November.

    [GBP, USD]
    Sterling rallied some, with Cable logging a 10-day peak at 1.2941, which is about 50 pips up on Friday's closing level. The pound has been bid since the release of the latest poll from ICM putting support for the Conservative Party at 45% versus 34% for Labour. Some of the responses came after the terrorist attack on Saturday night in London. This helped offset a couple of recent polls showing a much narrow lead, though the FT's poll of polls tracker has consistency showed the Conservatives with more than a 10 point lead.

    [USD, CHF]
    EUR-CHF has drifted to four-week lows in the mid 1.08s, despite SNB governor Jordan's "franc is too strong" rhetoric last week, and a set of soft Swiss data., including a 0.3% q/q Q1 GDP growth figure, which undershot the median forecast for 0.5% growth and compares to 0.7% growth in the same quarter in the U.S. and 0.5% growth in the Eurozone. EUR-CHF still remains well up on the sub-1.07 levels that were prevailing in April before the French presidential elections, and we expect this to remain the case unless the euro comes under heavy pressure.

    [USD, CAD]
    USD-CAD topped at intra day highs of 1.3501, just under its 50-day moving average of 1.3506, which now provides resistance. The pairing had been supported by the latest downdraft in oil prices, which saw WTI crude dip briefly under the $47/bbl mark. Laer, a partial crude recovery saw USD-CAD ease back into 1.3459.

    Paste link in email or IM