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By XE Market Analysis June 19, 2020 2:56 pm
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    XE Market Analysis: Asia - Jun 19, 2020

    The Dollar was mostly higher in N.Y. trade on Friday, causing the DXY to rally to near three-week highs of 97.71, after opening at 97.16. The only U.S. data were Q1 current account figures, which saw the deficit narrow slightly, though had no market impact. Wall Street opened higher, though turned red on profit taking into the weekend, which was prompted by Apple announcing it would re-close recently re-opened stores in some states with virus hot-spots. Treasury yields headed lower with stocks. EUR-USD fell to near 3-week lows of 1.1168 from early highs of 1.1254. USD-JPY peaked at 107.06 highs, later easing to 106.82. USD-CAD peaked at 1.3617, after printing opening lows of 1.3545. Cable hit three-plus week lows of 1.2349, down from early highs of 1.2412.

    [EUR, USD]
    EUR-USD hit 13-session lows of 1.1168, dipping under its 20-day moving average (1.1201) for the first time since May 25. The pairing bounced to 1.1215 into the London close, likely on pre-weekend short covering, though has since headed back to lows under 1.1185. The EU summit on the pandemic recovery fund ended with no agreement earlier, and appeared to have weighed on the Euro slightly in early N.Y. trade. A close under 1.1200 could open the door next week for a test of the 1.1100 mark.

    [USD, JPY]
    USD-JPY was again quiet, remaining inside of Thursday's trading band, and ranging between 106.76 and 107.06 since the open. Global economic and virus uncertainty will likely see the risk-sensitive Yen continue to move in line with sentiment, though until the next risk event presents itself, we look for the recent trading band between about 106.50 and 107.50 to prevail. USD-JPY resistance comes at the 50-day moving average, currently at 107.46, with support at the June 12 low of 106.58.

    [GBP, USD]
    Cable printed an 18-day low at 1.2349. UK retail sales data, released ahead of the London inter bank open, posted an above-consensus rebound in May, though to little market impact as this was hardly surprising following the historic contraction in April, before the lockdown was eased. The BoE's expansion of its QE program by GBP 100 bln, yesterday, and with its signal that further expansions are possible, along with policymakers' warning about there being a long recovery in store for the employment market, kept the pressure on the pound.

    [USD, CHF]
    EUR-CHF added to recent losses on Friday, hitting a June low of 1.0637. The cross 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. The SNB policy meeting was on Thursday, which stuck with negative rates for the foreseeable future and strengthened its commitment to intensify FX intervention if necessary to keep the CHF under control.

    [USD, CAD]
    USD-CAD headed from overnight highs of 1.3615 to 1.3545 lows early in the North American session. WTI crude hit a three-month high over $40.50/bbl, which helped the CAD, though a round of general USD selling after the open weighed on USD-CAD as well. The pairing later rallied following the horrible Canada retail sales outcome for April, and an oil price selloff, seeing USD-CAD eventually top at 1.3617, matching Thursday's high.

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