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By XE Market Analysis November 13, 2014 2:55 pm
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    XE Market Analysis: Asia - Nov 13, 2014

    The dollar was mostly higher in N.Y. trade on Thursday, though ranges were again relatively narrow. EUR-USD did manage to post modest gains however, trading up to the 1.2480 region, from opening levels near 1.2450. USD-JPY moved from 113.00 lows following the firmer jobless claims data, before heading over 115.80, where it ran into resistance. USD-CAD climbed to highs near 1.1375, as new trend lows in oil prices weighed down the CAD. Cable meanwhile, stayed heavy on talk of good EUR-GBP buying interest. Yields didn't do much of anything through the session, while Wall Street started out in the green, before slipping back to post modest losses. Friday's U.S. calendar reveals retail sales, import/export prices, and Michigan sentiment data.

    [EUR, USD]
    EUR-USD moved modestly higher in morning trade, reportedly on the back of EUR-GBP buying orders hitting the market. The dollar pairing moved to intra day highs over 1.2480, as cable moved under the 1.5700 level. The cross rallied to 0.7946 highs, levels last seen on October 17. EUR-USD ran into sellers ahead of offers noted from 1.2490, though stayed near session highs as Wall Street slipped in late dealings.

    [USD, JPY]
    USD-JPY has edged up to match opening levels, and later trading over 115.80, as Wall Street added to its modest opening gains. The pairing had touched 113.31 lows after the former U.S. claims data. The 115.70-90 region reportedly contains good two-way interest, with stops now seen over 116.10, which represents the seven-year peak made on Tuesday. USD-JPY managed 115.81 highs in morning trade, before easing back to 115.54. Since the London close, the pairing touched a 115.82 peak, and subsequently dropped off to 115.56 lows. Offers at 115.90-116.00 are said to be on the heavy side, and price action seemed to confirm that today. The pullback was also been helped by Wall Street turning negative, after it was poised for decent gains earlier. Support is expected into 115.50-30 now.

    [GBP, USD]
    EUR-GBP buying interest was solid on Thursday, weighing on cable, and taking the cross to 0.7946 highs, levels last seen on October 17. Cable moved under the 1.5700 level, its lowest since September, 2013. This extends the decline that was set in motion by the release of the November BoE Quarterly Inflation Report on Wednesday, which trimmed both GDP and inflation forecasts and noted that CPI is likely to fall below 1% over the next six months.

    [USD, CHF]
    EUR-CHF edged out a fresh 26-month low at 1.2017 on Thursday, in what is best described as cautious trade given the heightened risk of SNB intervention with the franc's 1.2000 cap in close proximity. The franc hasn't seen the south side of 1.2000, the SNB's cap, since it was implemented in Sept 2011. The central bank hasn't needed to intervene since 2012, and can be expected to be resolute in any new defence of 1.2000 after recently threatening negative interest rates if need be. Euro weakness and bouts of risk aversion have been weighing on EUR-CHF, while the approach of the so-call "gold initiative" referendum (aka "Save Our Swiss Gold") in Switzerland on Nov-30 is seen as potentially bearish for EUR-CHF. A 'yes' outcome would require the SNB to raise the percentage of gold reserves to 20% of the total from 8%, which SNB's Danthine argued "would severely constrain the SNB's room for manoeuvre in a future crisis."

    [USD, CAD]
    USD-CAD touched intra day highs of 1.1333 early in the session, reportedly bought up by domestic accounts. Wednesday's Asian high of 1.1359 provided the initial upside target, and with oil prices easing, and equities fading, buyers ultimately had the upper hand. Positioning may have been a factor through the session ahead of the Friday release of Canadian September manufacturing data. The pairing later moved over 1.1370, edging higher as WTI crude prices hit multi-year lows under $74.10, after opening near $76.25. USD-CAD stops were noted at 1.1360, just above Wednesday's peak, and could open the door for a test of 1.1400.

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