Home > XE Currency Blog > XE Market Analysis: Asia - Mar 25, 2014

AD

XE Currency Blog

Topics7698 Posts7743
By XE Market Analysis March 25, 2014 2:08 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 5622
    XE Market Analysis: Asia - Mar 25, 2014

    The dollar showed signs of firming in morning N.Y. trade on Tuesday, though USD longs ultimately threw in the towel. EUR-USD touched support at 1.3750 at the London close, though quickly ramped up over 1.3825 on a wave of intra day short covering. USD-JPY, which had struggled over 102.50, tested the level again, and failed, sending the pairing back into 102.20.The dollar bloc rallied on better risk taking levels, as stocks and commodities rebounded some, perhaps on hopes of fresh China stimulus. USD-CAD moved into 1.1160. as AUD-USD posted four-month highs 0ver 0.9170. U.S. data helped equities and risk levels, as consumer confidence came in better than expected, while new home sales were a touch under expectations.

    [EUR, USD]
    EUR-USD fell back under 1.3800 in early trade, with light stops tripped at the figure, on its way to 1.3785 lows. The pairing filled in Monday's afternoon gap higher, and later targeted the 1.3760-50 support region, marked by Monday and Friday's lows. The pairing hit session lows of 1.3750 following comments from the ECB's Draghi, who said he believes rates will become even more negative in the foreseeable future given the low structure of nominal rates and an expected pick up in inflation. The subsequent euro dip brought intra day short covering to bear quickly. Support had been seen at 1.3750, and buyers were quick to pounce with the level touched. The pairing later moved briefly 1.3835.

    [USD, JPY]
    USD-JPY gains again stalled out at the mid-102's, marking the fourth consecutive session the pairing has been capped at 102.50-70. Talk is Japanese backed sellers have been keeping a top on the dollar, with yen repatriation the play ahead of their fiscal year end on Monday. On the other side of the coin, since breaking higher after the FOMC announcement last week, USD-JPY has found solid support into 102.00. A break under 102.00 will likely see the market target the 101.60 region, levels seen before the FOMC.

    [GBP, USD]
    Cable held its own despite the cycle low U.K. inflation print earlier in the session. The pairing traded on either side of 1.6500 into the N.Y. open, and later made its way over 1.6540. We continue to target the 1.6400 level, with the BoE firmly in dove mode, especially after the soft inflation data.

    [USD, CHF]
    EUR-CHF recovered over 1.22. The SNB's decision to leave monetary policy unchanged last week while reaffirming the Swiss franc limit peg against the euro, had no market impact. The CHF has unwound a portion of its safe-haven premium following the placating tone of Russia's Putin earlier last week, though geopolitical tensions remain perky as the U.S. and the EU implements sanctions.

    [USD, CAD]
    USD-CAD was fairly steady overnight, moving on either side of 1.1200 in about a 25 point range. The uptick in risk taking levels found the pairing near session lows in early North American trade, as stocks and commodity prices moved higher. Better U.S. confidence data helped the CAD, and generally, with risk levels improved, USD-CAD made its way to 1.1156 lows.

    Paste link in email or IM