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By XE Market Analysis March 12, 2018 2:48 pm
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    XE Market Analysis: Asia - Mar 12, 2018

    FX trade was very light in N.Y. on Monday, with narrow ranges the rule overall, though the dollar did lose modest ground. The DXY slipped from opening highs of 90.10, before slipping back to 89.92 lows. EUR-USD topped at 1.2335, up from 1.3290, while USD-JPY was stuck inside of 106.65 to 106.42. USD-CAD meandered inside of 1.2814 to 1.2841, while cable rallied from 1.3841 to 1.3906 highs.

    [EUR, USD]
    EUR-USD opened at N.Y. session lows of 1.2290 before making its way to 1.2326 highs in light trade. Offers stepped in ahead of the London close, though follow through selling has been limited to 1.2311 lows. The pairing remains inside of its 20-day moving average of 1.2339, and the 50-day moving average at 1.2279.

    [USD, JPY]
    USD-JPY has managed just a 106.65 to 106.42 trading range through the N.Y. session, printing its lowest when Wall Street was at its worst levels, though since picking up to 106.57 highs as the Dow pares its losses. As hope for detente on the Korean peninsula remains, and as risk taking levels hold up, we expect USD-JPY to remain in buy-the-dip mode.

    [GBP, USD]
    The pound was higher on Brexit-related news, with the UK's junior minister of exiting the EU, Walker, saying that a transition deal is "very close." Cable lifted to a two-session high of 1.3906. The news from Walker comes as the EU leaders' summit on March 22nd-23rd starts to loom large.

    [USD, CHF]
    EUR-CHF cooled from its gains over the last week, after clocking a six-week high at 1.1745 on Thursday. The break higher has tracked a broader rebound in the common currency, with markets finding some relief as the new political picture starts to emerge following the Italian election on Sunday. While the results were messy, and brought Eurosceptic parties to the fore, the general view is that neither the euro or the EU will face an existential crisis. The EUR-CHF cross, which rallied some 10% from mid last year, has been emblematic of the euro's recovery over the last year, with the franc unwinding latent safe haven premium as existential uncertainties under the Eurozone and EU come off the boil. Former resistance is at 1.1563-65 now reverts as support.

    [USD, CAD]
    USD-CAD printed nearly two-week lows of 1.2803 overnight, before recovering to 1.2841 highs. Firmer oil prices weighed during the London morning session, though WTI crude has since fallen back, putting a floor under USD-CAD. Current risk-on conditions however, should limit upside going forward.

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