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By XE Market Analysis May 13, 2019 2:51 pm
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    XE Market Analysis: Asia - May 13, 2019

    The DXY fell to near one-month lows of 97.04 in early N.Y. trade on Monday, though later rallied to 97.32 as safe-haven flows into the Greenback kicked in. China's retaliation to the upped U.S. tariffs, drove the FX market. EUR-USD peaked at 1.1263 early on, later pulling back to 1.1228 lows. USD-JPY fell to new three-month lows of 109.04 on the back of severely risk-off conditions, which saw U.S. yields and stocks tumble. USD-CAD rallied to 1.3481 highs, with risk-off and falling oil prices supporting. GBP-USD fell to 1.2941 from 1.3040 through the morning session.

    [EUR, USD]
    EUR-USD eased from near two-week highs of 1.1263, touching 1.1228 lows before steadying. Safe-haven flows into the Dollar were noted following China's imposition of fresh tariff on U.S. goods, which largely unwound USD losses seen into the N.Y. open. EUR-USD is back under its 50-day moving average of 1.1249. Continued uncertainty on the trade front, should keep risk-appetite contained, which could see the Dollar remain firm on a flight to safety trade.

    [USD, JPY]
    USD-JPY dropped to three-plus month lows of 109.04, falling 50 points or so following news that China will retaliate with tariffs of its own on U.S. goods. Safe-haven Yen buying ratcheted up quickly on the report, while severe risk-off conditions, seeing U.S. equity futures plummet, and Treasury yields slide, has weighed heavily on the pairing. The January 31 low of 108.50 is the next support level.

    [GBP, USD]
    Cable fell from near 1.3040 to two-week lows of 1.2941 in N.Y. trade on Monday. The move lower came on resurgent Dollar strength, with safe-haven flows seen into the USD after China slapped retaliatory tariffs on U.S. goods. There was little bounce from the lows through the remainder of the session. Prime Minister May's government and the Labour Party are looking unlikely to reach an accord on a Brexit compromise. The deadline being put on these talks is reportedly the end of this week.

    [USD, CHF]
    EUR-CHF dropped to one-month low terrain below 1.1300. This has come amid renewed risk-off position in global markets as tensions between the U.S. and China on trade ratchet higher. This seems to have rekindled the Franc's safe haven appeal, despite the SNB's -0.75% deposit rate. EUR-CHF has support at 1.1320-23.

    [USD, CAD]
    USD-CAD topped at 1.3454 at the North American open, with gains coming on sharp risk-off conditions seen after China announced new tariffs on U.S. goods. A broadly weaker USD, along with a surge in oil prices early in the session saw the pairing pullback to 1.3424 lows before steadying. Later, as the USD rallied, and as oil prices again retreated, the pairing topped at 1.3481.

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