Home > XE Currency Blog > XE Market Analysis: Asia - May 04, 2015


XE Currency Blog

Topics7223 Posts7268
By XE Market Analysis May 4, 2015 2:34 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 5147
    XE Market Analysis: Asia - May 04, 2015

    FX trade was quite light in N.Y. on Monday, As London's holiday absence kept interest subdued. But for nearly in-line factory data, there was nothing on the calendar, though yields came off slightly, and Wall Street rallied. The dollar was flat overall, and plied narrow ranges versus the major currencies. EUR-USD idled between 1.1130 and 1.1190, as USD-JPY lingered inside of 120.05 and 120.27. Cable was sideways over 1.5100, as USD-CAD found support under 1.2100.

    [EUR, USD]
    EUR-USD managed highs of 1.1190, after basing at 1.1129 into the N.Y. open, though has since fallen back into the 1.1150 region. With London on holiday, activity was light overall, and more of the same can be expected through the afternoon session. Greece remains an issue, and should continue to limit euro's upside, though until U.S. data improves, dollar gains will not likely be forthcoming either.

    [USD, JPY]
    USD-JPY again held the 120.00 mark earlier, as it did overnight, with previous resistance at the level reverting to support now. Standing offers (Japanese exporters) continue to hinder upside, with last week's 120.28 high capping gains so far. A break of 120.40 should open the door for a test of the April 13 peak of 120.84, though given the relative quiet in FX Land today, this may have to wait until Tuesday.

    [GBP, USD]
    Cable has settled in the low-1.51s after last week's sharp U-turn from a high at 1.5498. We think the rally to 1.5498 will prove to be an aberration. This Thursday's UK election should be a consideration given outcome uncertainties and the fact that Cable lost about five points during the final run-in to the last election in 2010. The polls put the right-leaning Conservative Party in the lead, but some way short of an outright majority, which leaves the prospect of a left-leaning Labour-SNP (Scottish Nationalist Party) coalition as possible outcome.

    [USD, CHF]
    EUR-CHF has settled in the mid 1.04s after making a one-month high at 1.0508 last week. This came after the SNB last week expanded the number of groups subject to negative rates on deposits at the central bank, though the latest gain has been a natural euro rally. The central bank said at its March policy review that the franc is "significantly overvalued," and would "remain active in the foreign exchange market, as necessary." SNB Chairman Jordan said last Friday that "we will remain active in the foreign exchange market as necessary in order to influence monetary conditions."

    [USD, CAD]
    USD-CAD ranged between 1.2090 and 1.2134 through the North American session, with trade uninspiring at best. The early recovery in oil and gold prices helped the CAD, but with crude down $1/bbl from its highs, USD-CAD has been able to maintain the 1.21 handle. Tuesday's U.S. and Canadian trade reports my shake things up some, while with London back in the fray, prices action may perk up some.

    Paste link in email or IM