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By XE Market Analysis May 14, 2019 2:52 pm
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    XE Market Analysis: Asia - May 14, 2019

    The Dollar firmed up some in N.Y. on Tuesday, taking the DXY from 97.31 opening lows to 97.54. Wall Street rebounded, though Treasury yields didn't move much higher, capped by cool import and export price data. EUR-USD tested the 1.1200 mark, though was unable to break down. USD-JPY meanwhile, perked up some with Wall Street, though was capped over 109.70. USD-CAD peaked over 1.3485, though settled into 1.3460 as oil prices steadied at higher levels. Cable printed two-week lows under 1.2910.

    [EUR, USD]
    EUR-USD found support into the 1.1200 level through the morning session, bottoming at 1.1204 on several occasions, though unable to trade above 1.1220 since the open. A weak German ZEW outcome shifted Euro sentiment to the downside into the U.S. open, and it appeared N.Y. traders were keen to push the direction further. The pairing had topped at 1.1243 overnight. EUR-USD has mostly been stuck between its 20-day moving average at 1.1205 and its 50-day moving average at 1.1247 since the start of the week. A close above or below these levels may help determine direction for the remainder of the week.

    [USD, JPY]
    USD-JPY recovered slightly from early lows of 109.45, making its way to 109.71 highs in late morning. The rally on Wall Street, which wiped out about a third of Monday's sharplosses provided some support, as did steadier Treasury yields which were hammered lower yesterday as well. The uncertainty of the outcome of the U.S./China trade war however, will likely keep USD-JPY upside limited for now.

    [GBP, USD]
    A generally firmer dollar saw Cable lead the way in the latest phase, with the pair printing fresh two-week lows under 1.2910. This extends the quite-steep decline from the early May peak at 1.3176, which is the loftiest point reached over the last six weeks. The pound has now more than unwound gains seen following UK labour data earlier today, which showed the unemployment rate unexpectedly fell to 3.8% in March, the lowest rate seen since December 1974. However, average household income disappointed, with the bonus-included figure dipping to 3.2% y/y in the three months to March, down from 3.5% y/y in February. As we noted earlier, the more timely and forward looking PMI surveys for April highlighted a stagnation in the employment market, on net, so we would advise caution in reading too much into the new cycle low in unemployment.

    [USD, CHF]
    EUR-CHF recovered from one-month lows of 1.1289 seen in early N.Y. trade, topping over 1.1315 as risk taking levels improved. The lows came amid renewed risk-off position in global markets as tensions between the U.S. and China on trade ratchet higher, which seemed 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 matched its overnight high of 1.3487 early in the North American session, coming from London morning lows of 1.3457. The pairing continues to be influenced by oil prices and the risk-backdrop. The earlier lows came in concert with WTI's intra-day high of $61.99. Since then, crude's pullback to near $61.50, and general USD strength has allowed USD-CAD to run up to session highs. The pairing later steadied near 1.3470, with traders likely heading to the sidelines ahead of Wednesday's Canada CPI report.

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