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By XE Market Analysis May 11, 2020 3:03 pm
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    XE Market Analysis: Asia - May 11, 2020

    The Dollar was firmer to start the week, taking the DXY from early lows of 99.93 to a high of 100.28. Trading ranges were relatively narrow. There was no data released on Monday. Wall Street started out under water, though improved some later in the session, as tech stocks outperformed. Market concerns of re-opening the economy too quickly resulting in another wave of the virus, should continue to keep investors cautious. EUR-USD touched 1.0803 lows, down from 1.0844 highs. USD-JPY traded to near three-week highs of 107.75, from a 107.24 low. USD-CAD peaked at 1.4040, from a 1.3976 base. GBP-USD was held between 1.2362 and 1.2283.

    [EUR, USD]
    EUR-USD peaked at 1.0844 at mid-morning, up from opening lows of 1.0813. The pairing has since bottomed at 1.0803 into the London close. General USD buying was in place through the morning session, since ebbing as Wall Street pared losses. EUR-USD remains inside of ranges seen last week, and with the market continuing to look through data releases, we look for more of the same this week.

    [USD, JPY]
    USD-JPY has rallied steadily through the N.Y. session, topping at 107.75, up from 107.24 lows after the open, and overnight lows of 106.50. The pairing was bid during Asian trade, as local stocks markets rose, and remained bid on safe-haven USD buying in the U.S. session, as the re-opening of the U.S. economy raises fears over increasing coronavirus infections, which has weighed on Wall Street. USD-JPY has traded above its 50-day moving average for the first time since April 20.

    [GBP, USD]
    Cable fell from overnight highs of 1.2437 to 1.2283 in early N.Y. trade, driven by a moderate bid in the dollar. The U.K. today commenced its first baby-step to reopening its economy, with non-essential manufacturing now reopening. The UK and EU will commence with the next round of trade talks today. The British government has continued to insist that there will be no delay in the UK's end-of-year departure from its Brexit transition membership of the EU's customs union and single market. The UK has until July 1st to commit to this, so the pressure is on negotiators. Markets will continue to factor in a risk that the UK leaves the EU at the end of the year without a new trade deal, as many analysts see there is insufficient time to negotiate a new deal.

    [USD, CHF]
    EUR-CHF was held to narrow ranges in the low 1.05s to start the week. 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 edged off of 1.4015 highs following reports that Saudi would cut oil production more than expected, which saw WTI crude rally over $1/bbl. The pairing fell back to 1.3978 lows, though remains well above the 1.3900 lows seen in Asian dealings. Risk-off conditions have supported USD-CAD generally today, though bigger picture, the CAD does not appear to have much further upside with oil prices remaining in the $20s. Later, as WTI crude gave back gains, USD-CAD rallied to 1.4040 highs, and back above its 50-day moving average at 1.4018.

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