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By XE Market Analysis March 16, 2018 2:53 pm
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    XE Market Analysis: Asia - Mar 16, 2018

    The dollar bounced into the weekend, taking the DXY to highs of 90.38, levels last seen on March 1. U.S. data was supportive, as U. of Michigan sentiment came in stronger, along with better industrial production figures. EUR-USD dipped to two-week lows of 1.2260 from 1.2330 highs, while USD-JPY recovered to 106.23 highs from 105.60. USD-CAD sold off to 1.3065 lows early, bebore printing new trend highs of 1.3098. Cable was heavy through the morning session, bottoming at 1.3890 before recovering over 1.3900.

    [EUR, USD]
    EUR-USD printed two-week lows of 1.2260, with the move coming as the dollar perked up broadly on end of week position squaring. The U.S. political backdrop should keep the pairing in buy-the-dip mode going forward, though bigger picture, the euro remains confined to the well-worn range it has been in for the past two-months.

    [USD, JPY]
    USD-JPY made 106.23 highs, up from 105.60 lows seen at the open. Decent incoming U.S. data, and a relatively risk-on backdrop provided buying impetus today, with the pairing bouncing off of support seen at 105.58. Resistance now comes at 106.57, which represents the 20-day moving average.

    [GBP, USD]
    Cable lost ground through the N.Y. morning session on Fruday, as the dollar in general perked up on pre-weekend position squaring. Cable bottomed at 1.3890 before rallying back to 1.3939 highs after the London close. Market focus is on next Tuesday's UK inflation report for February, and the two-day EU leaders' summit, starting next Thursday, where the 27 are expected to agree a roadmap for a post-Brexit transition period.

    [USD, CHF]
    EUR-CHF has settled in a narrow-ranged consolidation near the 1.1700 level following the early-March break higher from sub-1.1500 levels. A seven-week high was logged last Thursday at 1.1741. The SNB yesterday announced unchanged policy, as had been widely anticipated, while reaffirming its commitment to monetary stimulus to keep what it still considers a richly-valued currency on a back foot. EUR-CHF 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. Even though Eurosceptic parties won about 50% of the vote in Italy's recent general election, there forming political alliance, led by La Lega, has said Italy will remain in the EU and retain the euro.

    [USD, CAD]
    USD-CAD pulled back from the fresh trend highs of 1.3096 seen at the open, resulting in a low of 1.3065. Profit taking from domestic names was noted, with selling into the softer manufacturing data reported. NAFTA and general trade concerns will continue to see the pairing bought on dips. Indeed, the pairing later topped at 1.3098.

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