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By XE Market Analysis May 15, 2019 2:53 pm
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    XE Market Analysis: Asia - May 15, 2019

    The Dollar was mixed in early N.Y. trade, seeing EUR-USD down at 1.1182 lows from London morning highs of 1.1217. News that the U.S. would delay imposing auto tariffs for 6-months saw that pairing rally back to 1.1224. USD-JPY was heavy, bottoming at 109.15, though later getting a lift from the rebound on Wall Street. USD-CAD headed lower as oil prices rose, falling to 1.3428. Brexit concerns saw Cable fall to three-month lows of 1.2826.Incoming U.S. data was mostly softer, with retail sales and industrial production missing the mark. The Empire State index was stronger than expected.

    [EUR, USD]
    EUR-USD shot higher on reports that Trump will not apply tariffs to auto imports for at least six-months. The pairing popped to 1.1225 from 1.1185 on the news, which saw the DAX rally over 12,000 and Bund yields move higher. The pairing later settled in just over the 1.1200 mark.

    [USD, JPY]
    USD-JPY looked set to test Monday's three-month low of 109.02 posted on Monday early in the session, bottoming at 109.15 after the open. The pairing got a reprieve from there following new that Trump would hold off on imposing auto tariffs for 6 months. The Dollar subsequently rallied to 109.69 highs, as Wall Street turned losses to gains. Trade worries will likely keep a top on USD-JPY for the foreseeable future, with further U.S./China skirmishes likely to come.

    [GBP, USD]
    Cable put in its fourth consecutive down day, breached April lows on route to printing a three-month low at 1.2826. Brexit was to blame. UK Prime Minister May announced there would be another parliamentary vote on Brexit in early June, to which Labour and other opposition parties promptly said that they will vote it down unless, in the case of Labour, the vote is on a cross-party deal, which at this juncture looks unlikely (the government and Labour remain in negotiations). May said that if Parliament fails to agree on a Brexit deal in June, then the choice will be between a no-deal Brexit or remaining in the EU. This comes with the newly established Brexit Party, which favours a no-deal exit from the EU, running high in the polls. This has rattled markets somewhat. EU parliamentary elections on May 23 will be an updated litmus test on public support for Brexit in the UK, with MEP candidates standing from both pro Brexit and pro Remain-in-the-EU parties.

    [USD, CHF]
    EUR-CHF recovered from one-month lows of 1.1264 seen in early N.Y. trade, topping over 1.1310 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 edged to one-week highs of 1.3493 early in the session, after the about in-line Canada CPI data. The modest gains were short-lived however, as oil prices later turned higher following the EIA inventory report, which revealed a smaller crude build versus the outsized gain seen from the API report on Tuesday. WTI crude topped $62.30, up from opening lows under $60.90. USD-CAD fell to 1.3428 in late morning trade.

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