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By XE Market Analysis May 23, 2014 2:41 pm
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    XE Market Analysis: Asia - May 23, 2014

    Ahead of long weekends in the U.K. and the U.S., FX trade was relatively quiet in N.Y. on Friday. Most desks about closed up shop by late morning EDT, resulting in a sideways dollar fro the most part. The euro dis stay soft, though did not test the London low near 1.3615. USD-JPY meanwhile, got a modest lift from a WSJ interview with BoJ chief Kuroda who voiced concern over further yen appreciation. USD-JPY had been on the rise through the morning, and it touched 102.00 briefly later in the session. U.S. new home sales were better than expected, which helped Wall Street post gains, and helped risk sentiment in general.

    [EUR, USD]
    EUR-USD's modest bounce from the 1.3616 lows ran out of steam at 1.3634, with the pairing idling on either side of 1.3630. Into the long U.S. and U.K. weekend, trade was generally light, and standing bids under 1.3610 contained through the session today. Stops were noted over 1.3650. EUR-USD later moved to N.Y. session lows of 1.3624, as ECB council member Coeure attempted to talk down the euro via DJ newswires. He said the central bank needs to take FX into account, and must be watchful of exchange rates. He said there is no currency war at present, but must keep cooperating.

    [USD, JPY]
    USD-JPY opened near 101.90, dipped to 101.75 before edging higher again. Later, BoJ governor Kuroda from a WSJ interview said he was signaling "concern over further yen strength". USD-JPY initially traded slightly higher near 101.85 initially, and later made 102.01 highs.

    [GBP, USD]
    After a quiet morning session, cable has tripped sell stops at 1.6830 (earlier London low), resulting in a move to intra day lows of 1.6815 at mid-session. With London largely gone, and N.Y. desks thinned out for the long weekend, cable liquidity was at a premium, resulting in the moderate dip. Bids are noted into 1.6800 now.

    [USD, CHF]
    EUR-CHF steadied near 1.2220. The Swiss franc has been weakening over the last several weeks, reflective of a eroding safe-haven premium as markets take a more sanguine view of the Ukraine situation. The cycle low of 1.2104 and 1.2100 are key big-picture support levels. The threat of SNB intervention into its 1.2000 limit peg helped to deter franc buying to some extent. SNB's Jordan repeated recently that the central bank remains committed to defending the currency cap.

    [USD, CAD]
    USD-CAD moved a little lower after the in-line Canada inflation data. The pairing had been struggling over the 1.0900 level since the open, and was pushed to 1.0880 after the numbers. Bids noted at the level supported for a while, though firm oil prices, and a generally positive risk backdrop limited buying interest, and saw the pairing dip to 1.0864 lows by nid-session.

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