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By XE Market Analysis November 6, 2019 3:05 pm
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    XE Market Analysis: Asia - Nov 06, 2019

    The dollar was mostly higher in N.Y. trade on Wednesday, taking the DXY to 97.98 highs from 97.78 early in the session. The index was unable to take out Tuesday's one-week high of 98.01. Incoming data had little impact, with productivity and unit labor costs both missing consensus forecasts. Some safe-haven USD buying was noted when a White House official reportedly said the U.S./China trade deal signing would be delayed to December, and ultimately may not happen at all. Wall street trade sideways, while Treasury yields dipped lower. EUR-USD eased to 1.1065 from opening highs near 1.1090, while USD-JPY traded between 109.13 and 108.82, hitting lows on trade concerns. Cable followed EUR-USD down, hitting 1.2844 lows.

    [EUR, USD]
    EUR-USD was on the decline from the N.Y. open, falling from 1.1090 to 1.1065 after the London close, though remaining above Tuesday's three-week low of 1.1063. Safe-haven Dollar buying stepped following a report citing a White House official saying a trade deal between the U.S. and China may not happen. Euro resistance now comes at the 1.1100 mark, where the 20-day moving average sits. The 50-day moving average at 1.1038 provides support.

    [USD, JPY]
    USD-JPY was steady through the N.Y. morning session, ranging between 108.95 lows seen after the 8:30 EST round of U.S. data, later peaking at 109.02. The pairing remains attracted to the 200-day moving average, which sits at 109.02, after yesterday closing above the level for the first time since April 29. This morning's flat trade has mirrored the risk backdrop, with Wall Street and Treasury yields little changed on the session. USD-JPY resistance comes at Tuesday's 109.25, then the October 30 three-month high of 109.29. Later, the pairing fell to intra day lows of 108.82 from over 109.05 on reports saying a trade deal between the U.S. and China may not happen, apparently according to a senior White House official. Wall Street took a tumble as well, though later recovered.

    [GBP, USD]
    Cable traded sideways in London trade, after a recent phase of pronounced outperformance, though was headed lower though the N.Y. session. The pairing opened near 1.2900, later bottoming at 1.2844 after the London close. EUR-USD losses weighed on the Pound. Brexit remains up in the air, and will likely continue to see Sterling gyrate within well-worn ranges until the U.K. general election in December.

    [USD, CHF]
    EUR-CHF slipped to near three-week lows of 1.0978 in N.Y. on Wednesday, again dragged lower by a generally under performing Euro. The pairing remains relatively buoyant overall, lifted recently by the diminishing in no-deal Brexit risks, which has been generally supportive of the euro. The cross last week printed a two-and-a-half-month high at 1.1059 and besides the early part of this week, has largely remained over 1.1000 for over a week.

    [USD, CAD]
    USD-CAD traded to a four-session high, bottoming at 1.3142 after yesterday's close, before making its way to 1.3192 in afternoon dealings. WTI crude prices moved lower, providing some support, though bigger picture, prospects for a BoC rate cut, as soon as December should continue to put a floor under the pairing going forward. The 1.3% decline in exports, reported Tuesday will reinforce the potential for a BoC rate cut. The BoC said last week that Canada has not been immune to the developments globally that have been characterized by "ongoing trade conflicts and uncertainty...restraining business investment, trade and global growth."

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