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By XE Market Analysis June 24, 2019 2:15 pm
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    XE Market Analysis: Asia - Jun 24, 2019

    The DXY fell to three-month lows into the N.Y. open on Monday, later recovering to 96.18 before heading lower again. Treasury yields remained under pressure, with the 10-year note rate holding just over the key 2.00% mark. A softer Dallas Fed index weighed on Dollar sentiment as well. EUR-USD briefly topped the 1.1400 mark, before steadying near 1.1390. USD-JPY fell back from 107.53 highs, eventually heading under 107.30 on the back of a weaker Wall Street. USD-CAD stayed inside of Friday's trading range, on either side of 1.3200, while Cable recovered from 1.2709 lows, peaking later near 1.2745. Soft U.S. yields will likely see the USD remain under pressure for the time being, though range trade is expected to prevail into the Trump/Xi trade meeting later in the week.

    [EUR, USD]
    EUR-USD headed to three-month highs, with buying picking up steam on the break over the 200-day moving average at 1.1352. The pairing so far has topped at 1.1368, an up from session lows of 1.1309. The FOMC's dovish outcome continues to have impact on the Dollar overall, with a July FOMC rate cut fully prices into the futures market. On the other hand, the ECB has been sounding very dovish lately, with Draghi earlier this week saying further rate cuts and QE could be on the table should conditions deteriorate further. Support now reverts to the 200-day moving average, with resistance at the March 22 top of 1.1390

    [USD, JPY]
    USD-JPY recovered from intra day lows of 107.25 seen into the N.Y. open, rallying to 107.53 at mid-morning, before falling back under 107.30. Modest risk-on conditions supported early, though the weaker Dallas Fed index, along with lower Treasury yields appeared to have prompted some profit taking. Friday's five-plus month low of 107.05 is the next support level, with Friday's high of 107.73 now marking resistance.

    [GBP, USD]
    Cable ebbed to an intra day low of 1.2709, reversing out of the one-month high seen at the London open at 1.2766. The pair remains comfortably above Friday's low, at 1.2642. The economic consequences of the prolonged uncertainty has been increasingly evident, and the BoE last week trimmed its Q2 GDP growth estimate to 0.0% q/q from 0.2% while stating that inflation remains well anchored, although still retained guidance for gradual tightening over the three-year forecast horizon (which assumes a smooth and orderly Brexit process).

    [USD, CHF]
    EUR-CHF remained under pressure, as geopolitics kept the safe-haven CHF in demand. The cross remained above last week's near two-year low of 1.1057 seen on Thursday, bottoming at 1.1065 in N.Y on Monday. A last minute cancellation of a U.S. bombing run on Iran on Friday, will keeps markets on edge, and likely continue to support the CHF.

    [USD, CAD]
    USD-CAD fell to 1.3178 lows into the North American open, coming from 1.3216 overnight highs. Another WTI crude rally, along with broad USD weakness weighed on the pairing earlier, though with oil prices down nearly $1 from its trend high of $58.21, USD-CAD rallied back over the 1.3200 mark. The pairing remains inside of Friday's trading band, with support now at 1.3163, and resistance at 1.3229. Tuesday's Canada calendar includes April wholesale data, with April GDP due on Friday.

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