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By XE Market Analysis March 17, 2017 2:49 pm
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    XE Market Analysis: Asia - Mar 17, 2017

    FX trade took a bit of a breather in N.Y. trade on Friday, with most major dollar pairings consolidating following USD losses seen earlier in the week. Dollar direction was mostly sideways, as witnessed by a near unchanged close in the DXY. Incoming U.S. data was mixed, as industrial production was light, while Michigan sentiment beat expectations. EUR-USD ranged between 1.0727 and 1.0756, while softer Treasury yields weighed on USD-JPY, leaving it to print 112.57 lows. USD-CAD remained near 133.00 through the morning session, though as oil prices weakened, the pairing rallied back to 1.3377 highs. Cable largely held it altitude, after printing trend highs of 1.2398 in London.

    [EUR, USD]
    EUR-USD largely flat-lined through the N.Y. session, ranging between 1.0728 and 1.0756 since the open. The euro has remained firm in the aftermath of the preferred market choice in Dutch elections, and after ECB member Nowotny said on Thursday that the deposit rate may be hiked before the repo rate. So the euro has earned a reprieve for now. The bigger picture of two more Fed hikes this year, and no ECB hikes anywhere on the horizon will likely keep euro bulls from pushing the upside too far in the coming sessions.

    [USD, JPY]
    USD-JPY faded from session highs of 113.20 to near three-week lows of 112.57, with the yields sensitive yen apparently picking up ground on the back of softer Treasury yields. From a technical perspective, the pairing broke under its 20- and 50-day moving averages after the FOMC announcement on Wednesday, and has been unable to trade over them since. The 20-day currently stands at 113.67, with the 50-day at 113.72.

    [GBP, USD]
    Sterling rallied over the last day following the unexpected dissention in favour of hiking the repo rate by 25bp by MPC member Forbes at the BoE's March policy meeting, and hawkish twist on inflation risks in the minutes. Cable topped at over two-week higsh of 1.2398 into the N.Y. open, and maintained altitude through the session.

    [USD, CHF]
    EUR-CHF found support into its 20- and 50-day moving averages on Friday, reclaiming the 1.07 handle in light trade. SNB left policy on hold, as expected on Thursday. No surprises from the SNB, which kept official policy parameters unchanged and re-affirmed its threat to intervene on currency markets as it keeps a watchful eye on the "significantly overvalued" currency amid the multitude of political risks hitting Europe this year.

    [USD, CAD]
    USD-CAD showed little reaction to the Canadian manufacturing data, moving slightly lower from 1.3330 to a North American session bottom of 1.3316. Since Thursday's close, the pairing traded a 1.3309 to 1.3346 range, consolidating sharp losses seen since the FOMC announcement. Oil prices were a modest weight on the pairing early, with WTI crude trading over the $49.00 level. Though later touched session highs of 1.3377 as crude moved to session lows. The 20-day moving average, currently at 1.3318, marks support now.

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