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By XE Market Analysis June 13, 2013 3:16 pm
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    XE Market Analysis: Asia - Jun 13, 2013

    The dollar was steady to higher in N.Y. trade on Thursday, helped initially by better retail sales and a modest drop in initial jobless claims. Equities turned higher, which helped the greenback at the margins, though short covering took EUR-USD off its lows into the London close. USD-JPY recovered to nearly 94.80 from just under 94.00 after the data, eventually trading to 95.00 in afternoon dealings. Cable moved higher with EUR-USD at mid-session, trading toward 1.5740, though settled in under the figure in afternoon trade. Friday's U.S. calendar reveals PPI, current account, industrial production, and Michigan sentiment data.

    [EUR, USD]
    EUR-USD managed 1.3346 highs after dipping under 1.3280 following better U.S. data. Buyers stepped back in on the move over 1.3300. Intra day short covering was seen out of London, after a better than 100 point drop from session highs in Europe. The pairing meandered between 1.3305 and 1.3345 for the remainder of the session, with solid afternoon equity gains having only limited positive impact on the dollar.

    [USD, JPY]
    USD-JPY briefly tested overnight lows. Option names that were long of dollars into the N.Y. cut liquidated positions after spot only managed 94.79 rebound highs. USD-JPY dipped from 94.40 and reached 93.92 lows. Poorly positioned intra-day accounts were stopped out, but follow through was limited by large Tokyo account bids. USD-JPY later touched N.Y. session highs of 94.92, though eased back some on reports of Japanese offers at 95.00. Stops are likely above the figure. More buoyant U.S. data and equities appeared help the dollar pairing on Thursday. On Friday, the Japanese cabinet is expected to approve PM Abe's growth plan and fiscal strategy, which may weigh on the yen further.

    [GBP, USD]
    Cable opened the N.Y. session near 1.5675 and traded a narrow range into the London close. From there, it took EUR-USD's lead, and moved up to near 1.5740, though U.K. names were quick sellers on the 1.57 handle. GBP continues to enjoy a resurgence in investment inflows as U.K. economic fundamentals point to an improvement in economic activity.

    [USD, CHF]
    The CHF was supported, but a good EUR-CHF bid fueled a small correction. EUR-CHF fell from 1.2280 overnight and threatened large bids at the 200-dma at 1.2220 by early Europe. The dollar pairing bounced out of 0.9130 over 0.9200 after support levels at 0.9110-20 held. However, there are doubts over whether EUR-CHF and USD-CHF can hold on to these levels if stocks markets unravel further. The SNB will be watching nervously. Of late it has highlighted the importance of its FX policy stance, particularly with deflationary headwinds still persisting.

    [USD, CAD]
    USD-CAD eased into the 1.0150 region into the North American open, where good bidding interest has been in place. Weaker risk appetite, along with some general recovery of the greenback supported the pairing early on, though as Wall Street rebounded, 1.0150 support ultimately held. Sell stops are noted under 1.0145, though more bids are layered from 1.0120 to 1.0100. Upside was limited to 1.0175 in light afternoon trade.

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