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By XE Market Analysis June 13, 2014 2:03 pm
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    XE Market Analysis: Asia - Jun 13, 2014

    The dollar was relatively steady in N.Y. trade on Friday, though generally added marginally to overnight gains. Cable steadied over 1.6950 after its sharp Carney driven gains overnight, while EUR-USD was sold off from 1.3555 at the open to lows near 1.3520. USD-CAD inched higher, albeit in a 20 point range, while USD-JPY reclaimed the 102 handle, though struggled over 102.10. U.S. May PPI was cooler than expected, which weighed briefly on the dollar, as did a softer Michigan sentiment outcome. Equities rallied, and yields edged up despite the growing tension in Iraq, and after Obama said U.S. military action in the region (likely airstrikes) could be a possibility.

    [EUR, USD]
    EUR-USD took a 30 point slide to 1.3530 in early N.Y. trade, with London based intra day accounts, and U.S. names seen with the selling interest. The pairing opened the London session near 1.3555, but was only able to muster a 1.3579 high. Intra day players, which were largely buyers from the lows, ultimately bailed out on the move under 1.3555 after the euro failed to test 1.3600. Thursday's 1.3613 low provided initial support, and later. the pairing made it to 1.3533 lows.

    [USD, JPY]
    USD-JPY traded between 101.95 and 102.13 through the N.Y. session Friday, supported by marginally firmer U.S. yields, which were countered by fresh geopolitical concerns from Iraq. Overall though, nothing has changed, and we see this pairing stuck in a narrow range for the foreseeable future, until the BoJ decides it next course of policy action.

    [GBP, USD]
    EUR-GBP logged a fresh 19-month low at 0.7976 just earlier while Cable found bids into 1.6945-50. Sterling dip buying appears to be the vogue as BoE's Carney has markets factoring in a rate hike by year-end. Significant option barriers are reported at 1.7000 and 1.7050. These levels, along with the May-5 high at 1.6996 and the August 2009 high is at 1.7045, are key resistance points. As for EUR-GBP, this is probably the better vehicle for sterling bulls given the now sharply contrasting stances of the ECB and BoE. We look for an eventual descent to the July 2012 low at 0.7755.

    [USD, CHF]
    EUR-CHF found a footing after making a one-month low of 1.2166 last week, though still holds below 1.2200. The CHF will bear watching over the near term, with geopolitics again rearing its head, this time from Iraq, where the country looks to be headed for further violence.

    [USD, CAD]
    USD-CAD was able to rally to 1.0870, resulting in a 22 point gain from session lows of 1.0848. Good bidding interest into 1.0850 earlier prompted some pre-weekend short covering, resulting in the modest rebound, which came despite better risk levels, and firmer oil prices.

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