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By XE Market Analysis May 1, 2020 3:20 pm
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    XE Market Analysis: Asia - May 01, 2020

    The Dollar stumbled early in the N.Y. session on Friday, taking the DXY to one-month lows of 98.79. The USD later perked up some, with short covering into the weekend reported. Incoming data was weak, though better than consensus forecasts. The April manufacturing ISM came in at 41.5, while March construction spending rose, against forecasts for a decline. the data had only fleeting impact on the FX market. Wall Street was sharply lower, following Trump threats to impose new tariffs on China goods. Treasury yields were fractionally lower. EUR-USD printed one-month highs of 1.1019, up from 1.0971 lows, while USD-JPY made its way from 106.60 to 107.08. USD-CAD topped at 1.4109 from 1.4009 lows. Cable slipped to 1.2486 from mid-session highs of 1.2546.

    [EUR, USD]
    EUR-USD topped at one-month highs of 1.1019 in mid-morning trade, up from opening lows of 1.0971. Unlike the dollar versus the Yen, which got a brief boost following the less weak than expected ISM and construction data, the Euro headed higher after the data. The ECB's failure to add further stimulus at its meeting on Thursday, along with the Fed's massive easing moves has supported the EUR this week, and the market will now eye the 200-day moving average at 1.1035.

    [USD, JPY]
    USD-JPY rallied to session highs of 107.08 following the upside surprises for both the manufacturing ISM and construction spending data, up from early lows of 106.60. The pairing has since pulled back under 106.75, as risk-off conditions deepen following Trump escalating his accusations against China about the coronavirus outbreak, including threatening new tariffs. This said, USD-JPY remains inside of Thursday's trading range, and has stuck to a band of 108.04 to 106.36 for the past two-plus weeks.

    [GBP, USD]
    Sterling came under some pressure today, giving back gains seen on Thursday. The Pound has been correlating with global equity market direction, similar to a commodity currency, over the last couple of months. Cable shed about 0.5% in posting a low at 1.2486 after the London close, which retraces about half of Thursday's gain.

    [USD, CHF]
    EUR-CHF pulled back from April highs of 1.0611 seen on Wednesday, as risk-taking levels turned lower again on Friday. The SNB has successfully been putting a cap on the franc, which has seen EUR-CHF in recent weeks skirt along just above the five-year low that was first seen on March 9th at 1.0505 without breaching it. Weekly sight deposit data out of Switzerland has pointed to the extent of SNB franc selling over the pandemic crisis period, which was most acute in March before basing out as global governments and central banks acted with interventions and stimulus packages.

    [USD, CAD]
    USD-CAD has rallied to one-week 1.4103 highs, after printing six-week lows of 1.3850 on Thursday. Trump's threat to slap more tariffs on trade with China has weighed on the trade-sensitive CAD, while WTI crude prices, still higher than Thursday's close, but well off session highs over $20.00/bbl have supported USD-CAD as well. The pairing is over both its 50-day moving average at 1.3935, and its 20-day moving average at 1.4034.

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