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By XE Market Analysis March 12, 2015 2:51 pm
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    XE Market Analysis: Asia - Mar 12, 2015

    The FX market was relatively quiet in N.Y. on Thursday, keeping the greenback fairly steady through the session. EUR-USD peaked at 1.0684 after weaker U.S. retail sales data, though quickly turned lower, to eventually touch 1.0590 lows. USD-JPY fell to 120.66, briefly, before climbing back to 121.35. USD-CAD reclaimed the 1.27 handle on another bout of oil price weakness, as cable made trend lows of 1.4858. EUR-GBP buying weighed on cable through the session. The dollar's move from 12-year highs overnight appears to have about run its course, and a period of consolidation can be expected before the unit moves higher again.

    [EUR, USD]
    EUR-USD gains were short-lived after the U.S. data, with the pairing trading into 1.0604 lows, after peaking at 1.0684. The euro slipped despite the narrowing of the 10-year Tsy/bund spread, which came in to 184 basis points, from 195 on Wednesday. Sell stops are reportedly building at 1.0580 now, which was the low into the N.Y. open, though standing bids were noted into the level. EUR-USD posted 1.0590 lows later, though spend much of the day above the 1.0600 mark.

    [USD, JPY]
    The unwinding of short EUR-JPY positions supported USD-JPY through the session, as the cross rebounded to near 129. USD-JPY slipped to 120.66 after softer U.S. retail sales data, though as Wall Street rallied sharply, the pairing reclaimed the 121 handle, and moved to highs over 121.40.

    [GBP, USD]
    BoE Governor Carney warned of "protracted effects of sterling's strength" during a speech at the Advanced Manufacturing Research Centre in Sheffield. He said "there is a risk that the combination of persistently low global inflation and the strength of sterling could weigh on prices here for some time." His remarks propelled Cable under 1.4900, to tremd lows of 1.4855 and EUR-GBP above 0.7140.

    [USD, CHF]
    EUR-CHF's 1.0650 level has evolved into an anchor point for the cross over the last few days, despite fresh euro underperformance over this period. The Feb-18 high at 1.0810 and the 1.0500 level, which is the alleged "soft floor" of the SNB, look likely to mark the boundaries of a new trading range for EUR-CHF in the months ahead, though we think the risks are skewed for more euro losses as the ECB QE program gets under way, which will likely test the resolve of the SNB.

    [USD, CAD]
    USD-CAD recovered from its post-U.S. data dip to 1.2617, trading back over 1.2680. As was the case with the greenback in general, USD-CAD reversed lower on profit taking overnight, coming off its better than one-month high of 1.2798 on Wednesday. Barring big swings in oil prices, we look for the pairing to stabilize into Friday's Canadian employment report, though risks appear to be to the upside for USD-CAD from there. USD-CAD later moved to session highs of 1.2713, the move coming as WTI crude slid under Wednesday's low of $47.32 basing at $46.84. A band of USD-CAD offers is reportedly in place from 1.2700 to 1.2720, which slowed gains into the close.

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