Home > XE Currency Blog > XE Market Analysis: Asia - Jun 26, 2019


XE Currency Blog

Topics7137 Posts7182
By XE Market Analysis June 26, 2019 3:18 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 5061
    XE Market Analysis: Asia - Jun 26, 2019

    The dollar was mixed in N.Y. trade, losing ground to the Euro and CAD, while posting gains versus the Yen, and moving largely sideways against the Pound. Soft U.S. durables and a wider goods trade deficit weighed on USD sentiment, though a rebound in Treasury yields, and a modest Wall Street rally supported USD-JPY, taking it to highs over 107.80. EUR-USD topped at 1.1391, while USD-CAD hit four-month lows of 1.3107 as oil prices rallied. Cable was rangebound between 1.2664 and 1.2701. Coming up in the U.S. on Monday, the third look at Q1 GDP, and weekly jobless claims.

    [EUR, USD]
    EUR-USD rallied to 1.1391 highs, after bouncing from the session low at 1.1348, which is also the 200-day moving average. The pairing has since run into sellers in front of the 1.1400 mark, settling in under 1.1380. Softer U.S. data weighed on the Dollar through the morning, though Fed Chair Powell's more neutral stance on policy may tone down market's aggressive easing potential, likely to limit EUR gains going forward. In addition, increasing prospects for further ECB easing should also keep a cap on EUR-USD.

    [USD, JPY]
    USD-JPY rallied to four-session highs of 107.75 in early N.Y. trade, up from overnight lows of 107.14. The Yen faded on the back of comments from U.S. Treasury Secretary Mnuchin, who said a trade deal with China is 90% complete, opening the door to progress when Trump meets with Xi in Japan on Saturday. The pairing touched N.Y. session lows of 107.60 following the weaker U.S. durables and larger goods trade deficit, though maintained altitude on the back of a higher Wall Street, and firmer Treasury yields. USD-JPY later printed 107.80 highs in afternoon trade.

    [GBP, USD]
    Cable turned lower after fleeting intra day rebound gains stalled above 1.2700, and is back within a few of pips of testing the three-session low seen during the London AM session at 1.2662. Reserve and overlay managers remain underweight the pound, awaiting concrete developments on the Brexit front. BoE Governor Carney remarked during parliamentary testimony earlier that market expectations for a no-deal Brexit scenario have risen by a "notable" degree, while his colleague Saunders said that the Brexit deadlines, as seen with the original March-29 one and the new October-31 one, produces an incentive for businesses and households to defer spending. The pairing dipped briefly under its 20-day moving average, though buyers subsequently stepped in.

    [USD, CHF]
    EUR-CHF picked up over 1.1200 in N.Y. trade, though remained heavy overall, as geopolitics keep the safe-haven CHF supported. 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 fell to near four-month lows of 1.3107 from over 1.3150 following the bullish EIA oil inventory report, which revealed a much larger than expected crude stock draw of 12.8 mln bbls. Incoming Canada data has been supportive of the CAD of late, while the Greenback has remained under pressure following last week's dovish FOMC outcome. Traders will look ahead to Canada April GDP figures on Friday, where forecasts were bolstered on Tuesday by firm wholesale data.

    Paste link in email or IM