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By XE Market Analysis May 28, 2015 3:12 pm
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    XE Market Analysis: Asia - May 28, 2015

    The dollar firmed up in N.Y. trade on Thursday morning, taking EUR-USD down to 1.0867, from 1.0950 highs in London. Despite the lack of Greece progress however, the pairing rallied back to match the overnight high in afternoon trade. USD-JPY made new highs, rallying over 124.45, though later falling back into 123.60 on Aso remarks, who voiced concerns over the speed of the yen's fall. USD-CAD traded over 1.2535 on weaker oil prices, though later eased under 1.2440 as crude rallied back. Cable posted a three-week low of 1.5360. Softer U.S. initial claims data, and firmer pending home sales largely offset, leaving little net market impact.

    [EUR, USD]
    EUR-USD was content trading either side of 1.0900 through the morning session, ranging between 1.0868 and 1.0929. A lack of fresh information on the Greek crisis likely kept the euro inside of narrow ranges, with available information on negotiation progress sketchy at best. The IMF's Lagarde said it was possible Greece left the EMU, but that would not mean the end of the Eurozone. She said there appeared little scope for an agreement in the near term, though EUR-USD ultimately moved to session highs of 1.0950 in afternoon trade, matching London's overnight peak. Yesterday's 1.0820 lows is marked as support now.

    [USD, JPY]
    USD-JPY headed south in afternoon trade, making N.Y. session lows of 123.63, after running into sellers in front of 124.50 earlier. Japanese exporters interest reportedly comprised the offers into the highs, but ahead of a wave of Japanese data overnight, profit taking set in in earnest. It appeared Japanese finance minister Aso's comments got the ball rolling, as he said "The current yen weakening in the past few days has been rough. I will closely monitor market moves". Japanese CPI, employment, industrial production and PCE numbers all highlight this evening, which could set the tone for the next JPY move.

    [GBP, USD]
    Sterling traded lower against the dollar on Thursday. Cable left an eight-week low at 1.5301 yesterday, steadying before coming under mild pressure after the second estimate of UK Q1 GDP was left unrevised at 0.1% q/q and 2.4% y/y, contrary to expectations for a one basis point revision on both counts. Cable fell to levels last seen on May 7 in N.Y. trade, falling to 1.5360.

    [USD, CHF]
    EUR-CHF dipped back under 1.0360 amid another round of euro underperformance. The recent foray above 1.05 stalled shy of the late-April high at 1.0508. SNB's Zurbrugg said last week that negative rates in force for as long as policy requires. This is the new boilerplate rhetoric of Swiss policymakers, who have been in a fight to curtail EUR-CHF's downside, though their options will be limited in context of any broad euro underperformance.

    [USD, CAD]
    USD-CAD rallied over the 1.2500 level for the first time since mid-April in early trade, peaking at 1.2538, and once again following crude oil's lead. NYMEX crude fell to $56.49 lows, a nearly one-month bottom. As oil came off its worst levels, and the greenback fell back some, USD-CAD later fell back under 1.2430.

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