Home > XE Currency Blog > XE Market Analysis: Asia - Mar 26, 2019

AD

XE Currency Blog

Topics6203 Posts6248
By XE Market Analysis March 26, 2019 3:17 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 4238
    XE Market Analysis: Asia - Mar 26, 2019

    After rising some early in the session the Dollar was largely steady through the close. The DXY had opened near 96.45, later stabilizing between 96.62 and 96.74. Incoming U.S. data was on the soft side, with housing starts, consumer confidence and Philly Fed index all missing the mark. None of the releases had much impact on the FX market. Yields edged up from yesterday;s lows, as Wall Street rallied, with markets apparently moving away from the "sky is falling" mentality seen after the Fed and the brief inversion of the U.S. yields curve. EUR-USD bottomed near 1.1280, while USD-JPY topped at 110.69. Cable remained form on hopes Brexit will be sorted out soon. USD-CAD peaked at 1.3412, later easing under 1.3380.

    [EUR, USD]
    EUR-USD remains rangebound, trading under Monday's low, though remaining over the two-week base of 1.1274 seen on Friday. The pairing bottomed at 1.1279 into the London close. The Euro looks set to close under its 20-day moving average at 1.1317 for the third consecutive day, seen as a negative development for the Euro. Sell-stops are reportedly building under 1.1270, just below last week's low.

    [USD, JPY]
    USD-JPY has held its bid through the session, topping at 110.69 into the softer confidence data, then slipping slightly to 110.50 lows. The risk-backdrop remains supportive, with Wall Street rebounding sharply, and Treasury yields firmer. Overnight, the Yen was weighed down by the BoJ's "Summary of Opinions" from the March policy meeting. This argued for "maintaining powerful monetary easing" in order to sustain momentum for hitting its price goals. A close over the 50-day moving average at 110.46 will give Dollar bulls some hope going forward.

    [GBP, USD]
    Cable printed a one-week high at 1.3261 early in the N.Y. session, later settling near 1.3225. Political developments have diminished the odds of a no-deal Brexit, with Parliament having defeated the government in the House of Commons late yesterday on a vote to allow the House to take control of the debate. Prime Minister May is still aiming to table a third vote on her EU Withdrawal Agreement tomorrow, hoping that Northern Ireland's DUP and the hardline Eurosceptics in her Tory part will acquiesce and vote in favour of it. If May's deal fails or, more likely, was not voted on at all, Parliament would be left in control. Parliament will also likely vote on making any new plan an act of parliament, which would legally oblige the government to accept Parliament's wishes. Parliament may also legislate against there being a no-deal Brexit. If a cross-party majority solution fails to materialize, then a referendum or a new general election would be on the cards.

    [USD, CHF]
    EUR-CHF has settled in the lower 1.1200s after diving sharply last week to a 10-week low at 1.1212. The rotation lower was a reflection of a broader decline in the Euro, which came amid disappointing Eurozone data (especially the preliminary March PMI survey readings) and a sharp drop in Bund yields, which saw the 10-year benchmark yield go negative for the first time since 2016. The cross has been seeing choppy directional impulses since the start of the year, often times characterized by bouts of pronounced underperformance in the Swiss franc that have often been accompanied by talk/suspicions of SNB intervention.

    [USD, CAD]
    USD-CAD eased back from Monday's two-week high of 1.3444, though remained relatively firm through the morning, trading near 1.3400, despite WTI crude prices reclaiming the $60 handle. U.S.-Canada trade talk likely weighed some on the Loonie, as the WSJ reports Canadian officials have linked approval of the new USMCTA deal to the removal of U.S. tariffs against Canada's steel and aluminum. USD-CAD appears to be in a holding pattern for now, with traders perhaps awaiting Canada trade and GDP data later in the week. Near term support is at 1.3380 with resistance at 1.3445.

    Paste link in email or IM