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By XE Market Analysis June 27, 2013 2:28 pm
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    XE Market Analysis: Asia - Jun 27, 2013

    The dollar traded higher through the morning session in N.Y. on Thursday, following stronger U.S. economic releases. May personal income beat expectations, while weekly jobless claims were in-line. May pending home sales were much better than forecasts, and resulted in the dollar moving to session highs in morning dealings. EUR-USD flirted with the 1.3000 mark, while USD-JPY moved briefly over 98.50. Trade is likely to be choppy through Friday's N.Y. close, as month/quarter end conditions prevail.

    [EUR, USD]
    The dollar moved higher after the better pending home sales data, taking EUR-USD from N.Y. session highs near 1.3050, to session lows of 1.3010. The pairing quickly turned back toward 1.3000 however, after running into a wall of sellers into 1.3050. Bids were still seen at the figure, though sell-stops were kept out of harms way, as thin-month end trade lifted the euro back to 1.3050 into the close. Sovereign buyers were rumored into 1.2950, along with option related demand under 1.3000, so downside could be a slow slog from here.

    [USD, JPY]
    USD-JPY reportedly ran into sellers over 98.30, with Japanese exporters the main suspects. Light stops were later tripped over 98.40 following better U.S. home sales data. Another positive day for equities largely kept the pairing supported, though it did ease back to 98.20 from session highs of 98.55 in afternoon trade. A heavy Japanese data calendar overnight could influence the yen, though month end flows will largely drive the market.

    [GBP, USD]
    Cable was forced to intra-day lows through 1.5220. A break below 1.5250 was a negative signal, while the dollar uptrend also gained momentum today from broadly positive U.S. data. Cable has not traded under 1.5200 since June-2 and sell stops are likely to be heavy through that level. There is good support at 1.5180 that may bring out buyers, but selling into strength is the favored strategy into the weekend. Note, during the European morning there were reports that dollar selling could go through for quarter-end, but so far these have not featured.

    [USD, CHF]
    The CHF added to losses as USD-CHF steepened gains into 0.9485 and EUR-CHF headed just over 1.2335. Fund demand for both the dollar pairing and the cross was persistent since the European open today. Since Wednesday's N.Y. afternoon macro funds were positioning in USD-CHF for further upside after the 100-dma was broken. EUR-CHF made steady gains from 1.2265 in the European morning and momentum fund activity accelerated on a break back above 1.2300. London source said EUR-CHF has had more opportunity to rally now that one large fund name had finished unwinding a position related to emerging market exposure earlier in the week. Interestingly, a Swiss name also put out a buy recommendation today now that the order has been filled.

    [USD, CAD]
    USD-CAD steadied near 1.0425 in London trade, after easing from 1.0475 in Asia. Dealings were fairly quiet, as positions were pared back in quarter-end conditions. USD-CAD bids were seen layered from 1.0425 to 1.0400, with stops underneath, while offers were in place from 1.0470. The pairing later ground its way through the1.0470 offers, and found itself up testing 1.0500, where more sellers were in place. Quarter-end related short covering was reportedly the main driver, with talk of Japanese backed selling of CAD-JPY over the 94.00 level.

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