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By XE Market Analysis June 15, 2020 1:50 pm
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    XE Market Analysis: Asia - Jun 15, 2020

    After rallying some overnight, the Dollar eased modestly in N.Y. on Monday. The USD had climbed through the Asian and European morning session on safe-haven buying, as heightened concerns over the rising spread of the virus supported. Wall Street opened sharply lower, though as it pared losses, Dollar flows were reversed, taking the DXY to 96.87 from 97.22. The May Empire State index bounced sharply to -0.2 from the previous -48.5, though had little impact on markets, though gave encouragement on the prospects for a V-shaped economic recovery. EUR-USD rallied from 1.1240 to 1.1293, while USD-JPY chopped between 107.20 and 107.39. USD-CAD fell from early highs of 1.3669, later bottoming at 1.3578. GBP-USD meanwhile, headed to 1.2579 from 1.2506.

    [EUR, USD]
    EUR-USD peaked at 1.1293 after basing at 1.1240 ahead of the open. Trade has been light overall, though the Dollar has generally turned lower as Wall Street losses are pared, resulting in some unwinding of USD haven flows that were put in place during the London morning session. EUR-USD has remained inside of Friday's trading range, and for now looks set to consolidate between 1.12 and 1.13 until the economic opening picture becomes more clear.

    [USD, JPY]
    USD-JPY recovered from 107.00 lows seen in early London, peaking over 107.45 in N.Y. morning trade. The pairing had fallen overnight with risk appetite, though with Wall Street and European bourses off their worst levels, the Yen has faded some. Friday's 106.58 low now marks support, with resistance at the 50-day moving average of 107.58.

    [GBP, USD]
    Cable printed a two-week low at 1.2455 in London morning trade, later making its way to 1.2579 highs at mid-morning in N.Y. As was the case with EUR-USD and USD-CAD, the Dollar lost ground as Wall Street pared its losses, as save-haven flows initiated overnight were partially unwound. GBP-USD support comes at 1.2455, the 20-day moving average.

    [USD, CHF]
    EUR-CHF has fallen back over the last week, 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, when the consequences of the pandemic increasing bets about a possible breakup of the euro area, and even the EU. However, since the Franco-German backed EU recovery fund gained traction in mid May, these bets have gone sour, which led to a rebound in EUR-CHF. The recovery fund is up for ratification at the June 18th-19th EU summit. Assuming this passes, as looks likely , this should keep EUR-CHF supported for a while.

    [USD, CAD]
    USD-CAD eased from two-week highs of 1.3686, heading to 1.3578 lows in North American morning trade. Weak Canada manufacturing data supported the pairing briefly, though since then, a $1 bounce in WTI crude to $35.30 has taken USD-CAD to session lows. Risk-off conditions will likely limit downside going forward, with Friday'd 1.3525 low seen as the next support level.

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