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By XE Market Analysis March 7, 2014 1:49 pm
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    XE Market Analysis: Asia - Mar 07, 2014

    The dollar lurched broadly higher after the better February NFP print on Friday, which came in at 175k versus expectations for a 145k print. EUR-USD fell from pre-open, two-plus year highs of 1.3915, to 1.3852 lows. USD-JPY meanwhile, spiked to 103.75 from 102.90. Yields and equities rallied sharply on the data, though Wall Street later gave back most of its winnings. Weekend risk event in the Ukraine, tempered stock bulls, as the dollar largely held most of its gains. January trade data revealed a slightly wider than forecast deficit, though given the jobs data, was largely lost in the noise.

    [EUR, USD]
    EUR-USD slipped lower following the NFP print, which was considerably better than forecasts. The pairing dipped to 1.3868 initially from around 1.3900. Meanwhile, the January trade deficit was a bit wider than expected, though the jobs report took the spotlight, and relegated the trade data to the background. EUR-USD later touched a low of 1.3852, though intra day short covering into the lows prevented further losses. Stops are likely in place at 1.3850, though look to be safe until Monday.

    [USD, JPY]
    USD-JPY posted its best levels since January 23, ramping up to 103.76 highs after the U.S. jobs data, from near 102.90. The surge in U.S. yields after the data provided support, as did the bounce on Wall Street. The pairing later eased back under 103.20, as stocks deteriorated on the back of weekend event risk in the Ukraine. The pairing steadied near 103.40 in light afternoon trade.

    [GBP, USD]
    Cable consolidated above 1.6700 in N.Y. trade, though took a hit following the U.S. jobs report, falling from over 1.6780. There seems to be a bullish view on sterling in market commentaries, though bearish calls on EUR-GBP were blown out the water after the ECB refrained from announcing further measures. The U.K. February PMI surveys this week showed continued solid expansion while the composite PMI was notable for showing the fastest rate of jobs growth since the PMI data series started in January 1998.

    [USD, CHF]
    EUR-CHF rallied to 1.2215 highs following the U.S. jobs report, though later, as risk appetite slipped back, and as the markets priced in potential event risk from the Ukraine this weekend, the cross slid back to 1.2175, its lowest since Tuesday. Swiss February CPI unexpectedly fell back into negative territory, coming in at -0.1% (Reuters median had been for 0.0%). This follows a three month stasis at 0.1% y/y. The data will keep SNB firmly committed to maintaining the 1.20 limit peg in EUR-CHF, in place since September 2011 to stem the risk of deflation.

    [USD, CAD]
    USD-CAD ranged between 1.0985 and 1.1007 in light London trade, as the market prepped itself for the employment and trade reports from both sides of the border. The pairing rallied sharply following the mix of data, where the Canadian employment report was worse than expected versus the U.S. report, which was considerably better. Perhaps offsetting was a narrower Canada trade deficit. USD-CAD spiked to 1.1098 highs, up from 1.0985 into the data. Sellers were noted into 1.1100, with larger stops seen over the figure, though these were kept outof reach.

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