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By XE Market Analysis May 29, 2015 2:14 pm
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    XE Market Analysis: Asia - May 29, 2015

    The dollar was largely range bound in N.Y. trade on Friday, as it showed brief signs of strength following weak, but not as bad as expected Q1 GDP revisions. Gains were fleeting however, as a soft Chicago PMI weighed on the buck soon after. EUR-USD shuttled between 1.0955 and 1.1006 through the session, ultimately closing over the 50-day moving average of 1.0969. USD-JPY gave back the 124 handle on its way to 123.72 lows, though showed resiliency in reclaiming the figure into the close. USD-CAD spiked up to 1.2527 highs after a very disappointing U.S. GDP report, though as oil climbed higher, eventually breaking the $60 mark, USD-CAD fell back into lows into 1.2455. Cable lifted off its recent lows, though ran into resistance into the 1.5300 mark.

    [EUR, USD]
    EUR-USD ran into good selling interest in front of the 1.1000 level, after rallying through the overnight session on month-end position squaring. Firmer European CPI data helped the euro as well, while better than expected, but solidly negative U.S. GDP did the dollar no favors overall. With the Greece crisis still in the forefront however, euro gains are seen as limited, with Monday's 1.1009 peak the initial resistance. A N.Y. close over the 50-day moving average of 1.0969 could shift the technical backdrop however, opening the door for a look at the 1.1200 region next week. The euro posted a 1.1006 high, though from there, spent the remainder of the session under the figure.

    [USD, JPY]
    USD-JPY traded back over 124, after taking a quick dip to 123.73 in the aftermath of the disappointing Chicago PMI data. The pairing showed resililence however, moving back over the figure, as U.S. equities cut losses on reports Greece would make its next IMF payment next week. There will be nothing of market moving potential out of Japan next week, though following a batch of weaker releases this week, calls for further BoJ intervention on the economy may begin to rise. The yen has stayed soft, perhaps as it prices in further stimulation, while the same can be said for the Nikkei, as it completed 11 straight session of gains.

    [GBP, USD]
    Sterling has lifted off its lows seen against both the dollar and euro today. Cable has lifted to the 1.5300 area after logging a three-week low at 1.5236. EUR-GBP is presently at 0.7188 bid after capping out at 0.7200, which is a 10-day high following three successive up days. The pound has come under pressure in recent days as the EU membership debate has created uncertainties for long-term investors, while there have been some relatively disappointing data out of the UK this week, with the Gfk consumer confidence for May diving to +1 from April's +4, while 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. Next week's May PMI surveys should restore a more upbeat sentiment on the economy.

    [USD, CHF]
    EUR-CHF dipped back under 1.0330 on Friday, despite EUR-USD's brief recovery over 1.1000. 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 popped from near 1.2440 to 1.2527 highs following the better than expected U.S. GDP revision, and the big quarterly "oops" in Canadian GDP. The rally fell short of Thursday's 1.5 month high of 1.2538, with further gains limited by continued oil strength through the morning. The pairing later settled back into 1.2450, as WTI crude traded to near $60.50, and up nearly $3 on the session.

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