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By XE Market Analysis March 10, 2014 2:52 pm
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    XE Market Analysis: Asia - Mar 10, 2014

    FX trade was subdued in N.Y. on Monday, as the dollar largely consolidated last week's moves. EUR-USD was steady between 1.3869 and 1.3890, as USD-JPY meandered inside a 103.15-40 band. There was no U.S. data to drive the dollar, though with uncertainty in the Ukraine in place, risk taking levels were depressed, which weighed on Wall Street and dented yields slightly. Tuesday's U.S. calendar is light as well, so price action may come from external releases and/or geopolitical developments overnight.

    [EUR, USD]
    FX trade remained subdued, with major dollar pairings moving inside of relatively narrow ranges. EUR-USD treaded water inside of 1.3860-90 from the open, as Friday's sharp gains were consolidated. The French central bank head said the stronger EUR creates down pressure on the economy as well as inflation, adding that the ECB is "not happy at the moment". These comments may have had a minor impact ahead of the the N.Y. open, but nothing lasting.

    [USD, JPY]
    USD-JPY was supported in front of 103.25 in early trade, with bidding interest reportedly coming from a mix of Japanese names. London accounts were buyers through their morning session, and were seen lightening up long positions over 103.40. With no new data due from the U.S., and the market digesting the overnight news, relatively narrow ranges held through the session. The pairing eased to 103.15 lows on the back of weaker equities, though settled in near 103.20 into the close.

    [GBP, USD]
    Sterling made new lows on BoE-speak by the deputy governor of the Monetary Policy Committee, Bean, who said any further appreciation of sterling would not be particularly helpful in terms of facilitating a rebalancing towards net exports. Sterling had already been under pressure today by news that Vodafone agreed a preliminary deal of over EUR 7 bln to buy Spanish cable company ONO. Cable made a low of 1.6622.

    [USD, CHF]
    EUR-CHF perked up over 1.2190 in N.Y. trade, though geopolitical risk remains over the Ukraine, which is returning support to the safe haven franc. SNB's Jordan said over the weekend that the central bank would defend the 1.2000 EUR-CHF limit if concerns about Ukraine drove the franc higher. The SNB has signalled that it would only consider removing it if inflation was much higher (CPI dipped back to -0.2% y/y in February).

    [USD, CAD]
    USD-CAD posted one-week highs of 1.1131 in London, though eased back toward 1.1100 in early North American trade. Initial resistance is seen at 1.1148, which was the February 28 peak. Support comes in at 1.1070, the post-jobs report low on Friday, though a move under the level may bring stops to bear, prompting the market to close the "gap" from 1.1000 which occurred after the employment data. In the meantime, traders noted domestic names on the bid into the 1.1100 mark. The pairing later managed lows of 1.1093, before reclaiming teh 1.11 handle in very light dealings.

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