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By XE Market Analysis March 12, 2019 2:30 pm
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    XE Market Analysis: Asia - Mar 12, 2019

    The Dollar index headed higher into the N.Y. open, though quickly lost ground after the N.Y. open. The DXY peaked at 97.28 early, later falling to 96.92 lows. A slightly cool U.S. CPI report weighed on the Dollar, while upbeat USTR comments on U.S.-China trade talks removed some of the USD safe-haven bid as well. EUR-USD rallied from 1.1250 lows to top at 1.1295. USD-JPY meanwhile took a look at the 111.00 mark, later bouncing to 111.40. USD-CAD fell from 1.3417 to 1.3370 as WTI crude printed one-week highs. Cable remained highly volatile ahead of this evening's U.K. parliamentary vote on Brexit, though recovered from lows near 1.3000.

    [EUR, USD]
    EUR-USD rallied to four-session highs of 1.1295, coming from 1.1250 lows seen at the open. There have been reports of EUR buying into today's Brexit vote in London, with EUR-GBP maintaining a bid tone as well. An extension of article 50 appears to be the odds on favorite Brexit outcome, which would likely see Cable turn higher, dragging EUR-USD up with it.

    [USD, JPY]
    USD-JPY tested its 200-day moving average at 111.40 ahead of the N.Y. open, topping at 111.44 then falling back to 111.11 lows after the benign U.S. CPI outcome. Aside from the Dow, which continues to be weighed down by Boeing shares, the risk backdrop remain supportive of the pairing, with the S&P 500 and NASDAQ posting decent gains. Support is at the 20-day moving average of 111.09. The pairing later topped at 111.40 as Wall Street hels its gains.

    [GBP, USD]
    The Pound found its feet after a sell-stop fueled rout following news that the UK's Attorney General concluded that the concessions won by Prime Minister May on the Irish backstop would still leave the UK "without an internationally lawful means of exiting the protocol's arrangement." Cable recouped to levels around 1.3130-50, up from the sell-off low at 1.3005. While May's Withdrawal Agreement is set to be voted down this evening, and while a fog of uncertainty remains, the odds for a delayed but soft Brexit are higher than they were, with a remaining-in-the-EU scenario also a possibility.

    [USD, CHF]
    EUR-CHF printed a two-week high at 1.1385, buoyed by the rebound in EUR-USD, with the common currency benefiting from progress on the Brexit front. The cross has continued on a relatively choppy path, the latest phase of which have been the current rebound after sharp Euro declines following the ECB's lending move last Thursday. The cross has been seeing relatively high volatility since the start of the year, often times characterized by bouts of pronounced underperformance in the Swiss franc that have often been accompanied by talk/suspicions of SNB intervention.

    [USD, CAD]
    USD-CAD posted one-week lows of 1.3397 following the tame U.S. CPI data, which weighed generally on the Greenback. Oil prices kept a ceiling on the pairing this morning, with WTI crude finding support over the $57 mark, after printing eight-session highs of $57.46 ahead of the North American open. The pairing later fell to 1.3370. USD-CAD support now comes at 1.3348, the March 6 low.

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