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By XE Market Analysis June 12, 2020 1:46 pm
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    XE Market Analysis: Asia - Jun 12, 2020

    The DXY headed to highs of the week in N.Y. on Friday, topping at 97.24, up from early lows of 96.63. Data saw May import prices and the University of Michigan sentiment index rise more than expected , which appeared to have supported the Dollar to a degree, as well as Wall Street. Stocks headed higher, offsetting some of Thursday's huge losses, the major indices were down overall for the week. Treasury yields were up as well. EUR-USD fell from 1.1322 to 1.1234, while USD-JPY made its way from 107.21 to a high near 107.50. USD-CAD rallied from 1.3536 to 1.3628, while GBP-USD opened at highs of 1.2638, later falling to one-week lows of 1.2505.

    [EUR, USD]
    EUR-USD fell from 1.1322 highs in early trade, later falling to 1.1234, lows of the week. There appeared to be some relationship between Wall Street levels and EUR-USD levels through the session. Save-haven pre-weekend flows into the USD were then reported after stocks squandered the bulk of their early sharp gains. As Wall Street fell, EUR-USD headed to session lows ahead of the London close. Later, as stocks again rebounded, EUR-USD rallied from 1.1234 to highs near 1.1260.

    [USD, JPY]
    USD-JPY has been range bound through the N.Y. session on Friday, managing just a 107.21 to 107.48 trading band since the open. The Yen market appeared fatigued to end the week, which saw a high of 109.70, and a low of 106.57 since Monday. Largely risk-ff conditions hits week lifted the JPY four four-straight days, leaving Friday's Wall Street rally as a catalyst for pre-weekend short covering. There are bound to be further bouts of risk-off in the coming days and weeks, as the global recovery from the pandemic is not likely to be linear. There will be ups and downs, and the Yen should continue to react accordingly.

    [GBP, USD]
    Cable was soft on Friday, falling to 1.2505 lows in N.Y. a one week low. The move lower was partly due to the continued lack of encouraging signs on the EU-UK trade negotiation front, partly due to USD strenght, and partly due to UK April GDP data showed a 20.4% m/m contraction, which left the rolling three-month trend at -10.4%. April industrial production contracted 20.3% m/m. April should prove to be the bottom, as data from this month captured the full effect of the lockdown, which starred on March 23rd in the UK. Economic reopening started in mid May. Although the GDP and production data were even worse than median forecasts, the data has had little bearing on UK markets, which are looking ahead to economic reopening.

    [USD, CHF]
    EUR-CHF has fallen back in recent sessions, though has continued to trade comfortably above the series of lows near 1.0500 that were seen from March through to mid May. Committed SNB intervention prevented the 1.0500 level from being breached over this period.

    [USD, CAD]
    USD-CAD eased back from overnight two-week highs of 1.3630, posting 1.3525 lows into the North American open. A partial recovery in WTI crude prices gave the CAD some support through the London morning session, though crude has steadied well under highs seen earlier in the week, which limited the CAD's upside potential. Risk-taking levels rebounded today from Thursday's meltdown, though another oil price pullback, and a gereally stronger USD saw USD-CAD rally back to 1.3628 late in the morning.

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