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By XE Market Analysis March 20, 2014 3:03 pm
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    XE Market Analysis: Asia - Mar 20, 2014

    The dollar firmed further in early N.Y. trade on Thursday, adding modestly to gains posted after the FOMC on Wednesday. As Wall Street turned higher however, and Treasury yields peaked out and subsided some, the dollar and the yen came off their best levels through the remainder of the session. EUR-USD bottomed at 1.3750 before climbing back over 1.3780, while USD-JPY touched 102.30 before rallying over 102.55. U.S. data was mixed but had little impact, as jobless claims were a touch lower, leading indicators better than forecast, and existing home sales a tad soft.

    [EUR, USD]
    Dollar gains stalled out as Wall Street turned positive, and yields topped out, for now at least. EUR-USD was well supported into 1.3750, and made its way back over 1.3780 in subsequent trade. With U.S./EU fundamentals favoring the dollar however, we look for EUR-USD sellers to return on moves over 1.3800.

    [USD, JPY]
    USD-JPY found good support into the 102.30 level through the morning session, and as risk appetite improved, eventually made its way over 102.50. The pairing wiggled slightly on the announcement of additional U.S. sanctions on Russian officials, though had little lasting impact, as stocks powered back erasing Wednesday's post-Fed losses. USD-JPY looks rangebound for now, though talk of Japanese backed yen repatriation into year end could weigh.

    [GBP, USD]
    Cable continued to trade down into the N.Y. open, basing at 1.6480 before finding some footing. As the dollar generally faltered from late morning, sterling managed to reclaim the 1.65 handle, peaking at 1.6518. The market may start to rethink cable shorts at current levels, and some consolidation may be in the cards pre-weekend. This said, the BoE remains concerned with sterling's strength.

    [USD, CHF]
    EUR-CHF and USD-CHF were in familiar ranges through the N.Y. session, though the improved risk backdrop helped EUR-CHF higher. USD-CHF was fairly steady, though was weighed down marginally by a generally softer USD.

    [USD, CAD]
    USD-CAD made a new multi-year peak of 1.1278 into the North American open, with the combination of a more dovish sounding BoC, and a more hawkish sounding Fed driving the pairing higher. More barrier options were noted at 1.1300, which were likely defended, while standing offers were noted from 1.1285. Stops would have been a feature over the figure, though the sellers won the battle, ultimately seeing the pairing ease back to 1.1235, as risk appetite improved, and profit taking set in.

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