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By XE Market Analysis March 19, 2019 3:08 pm
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    XE Market Analysis: Asia - Mar 19, 2019

    The Dollar was range bound in N.Y. trade on Tuesday, as market participants largely sat on the sidelines ahead of Wednesday' FOMC announcement. The USD had been under some pressure over the past few sessions, as traders priced in a dovish leaning announcement from the Fed. Risk could be skewed to the upside for the Greenback, should the FOMC come across more hawkishly than anticipated. EUR-USD chopped around inside a 1.1361 to 1.1340 bank, while USD-JPY was stuck inside of a 111.47 to 111.25 range. USD-CAD bottomed at 1.3250 early, then bounced to 1.3318 highs as oil prices faded lower. Cable was fairly steady on either side of 1.3260.

    [EUR, USD]
    EUR-USD has again been quiet in N.Y. trade, ranging between 1.1361 at the open, and 1.1340 in late morning dealings. Traders are likely sidelined ahead of Wednesday's FOMC announcement, where focus will be on the Fed's forecasts, including the dot plot, as well as what's indicated on the timing of the balance sheet run-off. We expect the dots to be trimmed with the median showing just one tightening this year, down from two in December, and another in 2020. Until then, we look for recent ranges to hold up, with the Euro likely to remain stuck between its 20- and 50-day moving averages, currently at 1.1320 and 1.1355, respectively.

    [USD, JPY]
    USD-JPY remained range bound, though moved to intra day highs of 111.47 in early N.Y. trade, buoyed by another Wall Street rally. Buyers emerged overnight under the 20-day moving average of 111.29, though Dollar bulls so far have been hampered by profit taking related selling over the 200-day moving average, currently at 111.44. The pairing later dipped to 111.25 as Wall Street fell briefly on reports that China was pushing back on U.S. trade negotiations.

    [GBP, USD]
    Sterling was near unchanged on the day against the dollar, euro and yen, fitting the overall theme of pre-event risk hunkering down in forex markets and totally belying the state of constitutional crisis in the UK. Cable saw demand during the late London AM session, which left a three-session high at 1.3311, before the pair ebbed back to the 1.3250-60 area. The move by the House of Commons speaker to rule out a third vote on the prime minister's Withdrawal Agreement, unless re-submitted in a motion with substantive changes, has thrown a spanner into an already chaotic Brexit process. A joint statement from the president of the EU council and the Irish PM said they are waiting for proposals from London ahead of the EU leaders' summit on Thursday. May is expected to ask of a delay, and is reportedly considering both a short and long delay.

    [USD, CHF]
    EUR-CHF has settled lower, in the mid 1.1300s, after posting a two-week high last week at 1.1385. 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.

    [USD, CAD]
    USD-CAD dropped to near three-week lows of 1.3251, reportedly tripping sell stops on the way through the 20-day moving average at 1.3290, and last Thursday's low of 1.3287. The pairing had been on the decline in London morning trade, reacting to WTI crude's rally to fresh four-month highs of $59.57. USD-CAD's move under its 50-day moving average of 1.3262 since prompted some short covering related buying. Oil prices later retraced lower, resulting in USD-CAD rallying to 1.3318.

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