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By XE Market Analysis June 11, 2020 2:45 pm
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    XE Market Analysis: Asia - Jun 11, 2020

    After falling early in the session, the Dollar put in a modest recovery through the remainder of the session, taking the DXY from 96.01 to 96.67 highs. Incoming data included jobless claims, which were close to expectations, and May PPI, which saw the headline number rise more than expected. There was little FX reaction to the data. Wall Street was crushed, as the gloomy FOMC outlook, and concern over increasing virus cases weighed on stocks. EUR-USD peaked at 1.1402 before falling back under 1.1310 after the London close. USD-JPY dipped from 107.14 to 106.58, later bouncing to 106.89. USD-CAD headed to near two-week highs of 1.3606, up from 1.3480 lows. GBP-USD peaked at 1.2685 at mid-morning, later falling to 1.2591 lows.

    [EUR, USD]
    EUR-USD headed to 1.1336 lows into the N.Y. open, down from London morning highs of 1.1401. From there, the gloomy FOMC outlook on Wednesday, causing a meltdown on Wall Street, along with concerns over rising virus cases in the U.S. saw the Dollar lose ground early in the session, taking EUR-USD to intra day highs of 1.1402. A bout of position squaring, and perhaps the beginning of another round of safe-haven USD buying subsequently saw the Euro fade back under 1.1310. Looking ahead, the Dollar's safe-haven role will likely remain a factor should risk-off conditions persist, likely to limit further EUR-USD gains going forward.

    [USD, JPY]
    USD-JPY posted one-month lows of 106.58, marking the fourth- consecutive session of lower daily lows. Severe risk-off conditions have seen the risk-sensitive Yen rally, while a downdraft in Treasury yields has weighed on the pairing as well. USD-JPY has fallen below its 200-. 50-, and 20-day moving averages this week alone. The next support level comes at the May 11 low of 106.54.

    [GBP, USD]
    Cable peaked at 1.2685 in N.Y. morning trade, before pulling back to 1.2591 lows after the London close. A lack of progress on the U.K./EU trade negotiations is likely to keep a lid on Sterling going forward. The UK data calendar brings April GDP and second-estimate Q3 GDP data on Friday, alongside April production and trade figures.

    [USD, CHF]
    Eur-CHF fell for the fifth-consecutive session, bottoming at two-week lows of 1.0658. Another round of risk-off conditions took the cross lower. The SNB had been defending an informal line-in-the-sand at 1.0500 since early March in an effort to limit Franc appreciation and, thereby, disinflationary forces on the Swiss economy.

    [USD, CAD]
    USD-CAD made near two-week highs of 1.3606, up sharply from the three-month lows of 1.3313 seen following Wednesday's FOMC announcement. Risk-off conditions today, along with a near 9% WTI crude sell-off, have drove the pairing higher through the session. The 20-day moving average at 1.3710 provides the nest resistance level, with support now coming in at the 200-day moving average, which is currently at 1.3466.

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