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By XE Market Analysis June 25, 2019 2:16 pm
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    XE Market Analysis: Asia - Jun 25, 2019

    The Dollar was fairly steady, though under some pressure in N.Y. morning trade on Tuesday. Softer U.S. consumer confidence and housing data kept stocks and yields down, weighing on USD sentiment. Late, the DXY rallied to intra day highs following comments from Fed chair Powell, topping at 96.23, and up from N.Y. session lows of 95.92. EUR-USD dipped to 1.1351 lows, though had been on its way down after Fed's Bullard said a 50 basis point July cut would be overdone, while USD-JPY popped to highs of 107.38 from 106.90. Powell said the FOMC will closely monitor conditions before changing policy, perhaps not as dovish as many had expected. Cable dropped to 1.2672 from earlier highs of 1.2742, as USD-CAD peaked at 1.3208.

    [EUR, USD]
    EUR-USD was range bound through the morning session, idling between 1.1379 and 1.1399 into the London close, and down from three-month highs of 1.1412 seen in London morning trade. The pairing later fell under 1.1345. The move down was initially prompted by comments from the Fed's Bullard, who said a 50 basis point July rate cut would be overdone. Fed chief Powell then remained relatively middle of the road, saying the FOMC would "closely monitor" conditions before shifting its policy stance.

    [USD, JPY]
    USD-JPY fell to N.Y. session lows of 106.84, coming from opening highs of 107.13. The pairing managed to remain above the overnight six-month bottom of 106.80, though has struggled to reclaim the 107 handle this morning following soft incoming U.S. data. With Stocks and Treasury yields heavy still, and lowered expectations for trade talk progress when Trump and XI meet later this week at the G-20, USD-JPY downside would appear to be the riskier direction for now. That said, the pairing later bounced to session highs near 107.40, following Powell's non-committal stance on rate cuts.

    [GBP, USD]
    Cable reversed out of a one-month high at 1.2784, which was printed in the early London AM session on the back of a then softening dollar. This follows four consecutive up days seen from last Tuesday through to last Friday, reflecting the re-pricing of Fed policy expectations following the FOMC guidance of last Wednesday. GBP-USD faded through the N.Y. morning session, then was hit to session lows of 1.2672 following non-committal comments from Fed chair Powell, who said the FOMC will "closely monitor" conditions. With Brexit uncertainty to remain in place for the next while, we expect Sterling to be sold into modest strength.

    [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 1.1062 in N.Y on Tuesday. Trade concerns, and ongoing tensions between the U.S. and Iran will likely keep the CHF supported for now.

    [USD, CAD]
    USD-CAD headed to intra day lows of 1.3153 following the better Canada wholesale trade outcome, ultimately finding support ahead of last week's multi-month low of 1.3151. WTI crude prices had been edging higher, and back over the $58 mark again, which had weighed on USD-CAD from the North American open. The pairing later bounced to 1.3208 highs after neutral comments on Fed policy from chair Powell.

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