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By XE Market Analysis November 13, 2019 3:15 pm
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    XE Market Analysis: Asia - Nov 13, 2019

    The Dollar index posted fresh trend highs of 98.45 ahead of the N.Y. open on Wednesday, though settled inside a narrow range through the day. A slightly warmer CPI outcome had little impact on the USD, while a fall in Treasury yields as risk conditions faded, and a benign Powell speech weighed slightly on the Greenback. EUR-USD faded to trend lows of 1.0995 from 1.1020 into the open, as USD-JPY eased to 108.65 from 108.90. USD-CAD was soft through the morning session, basing at 1.3235, later popping up over 1.3260. Cable was range bound through the session, centered on the 1.2840 level.

    [EUR, USD]
    EUR-USD printed another new bottom, touching 1.0995, the lowest in a month. The pairing has now posted five-straight lower daily lows, with the market theme of a strong U.S. economy versus a weak European economy, and the USD interest rate advantage driving EUR-USD down. The October 15 low of 1.0991 is now in the cross hairs, while the market may test the two-plus year lows of 108.79 seen in October, should current economic trends hold up.

    [USD, JPY]
    USD-JPY has fallen to one-week lows of 108.66, down from overnight highs of 109.15. The drop has come on the back of largely risk-off conditions, resulting in lower modestly lower equities and Treasury yields. Trade talk uncertainty remains a weight on the pairing, though barring a Wall Street meltdown, further losses should remain contained. Last Thursday's 108.66 low provides interim support.

    [GBP, USD]
    Cable was steady through the N.Y. session, ranging between 1.2822 and 1.2847. Sterling markets were unperturbed by the U.K. CPI miss, with both UK yields and the pound reversing at least most of the declines seen in the immediate wake of the data release. UK October CPI, to recap, missed to the downside, at 1.5% y/y, the lowest rate seen since November 2016 and follows 1.7% in September. Focus remains on political campaigning in the UK into the December-12 general election. Politico's poll tracker shows the Conservatives now command 39% support, up 3 points over the last two weeks and up from 28% at the time Johnson took over from Teresa May in late July. With the Brexit Party having backed down, the Conservatives are likely to see their lead strengthen, and they now look well positioned to win the election and return to Parliament with a majority. That in turn implies Brexit being implemented in January.

    [USD, CHF]
    EUR-CHF has seen some choppy trading in recent sessions, but with an overall downside bias, despite the abatement in no-deal Brexit risk and the recent blast of risk-on positioning in global markets. A generally weak Euro saw the cross hit one-month lows of 1.0878 in N.Y. on Wednesday.

    [USD, CAD]
    USD-CAD has pulled back slightly from the one-month high of 1.3268 printed in early North American trade, later slipping toward 1.3235. For the second straight day, Canadian names have been sellers from the open, though soft Canada data, and the USD's interest rate advantage will keep the pairing in buy-the-dip mode. The next upside target is the 200-day moving average at 1.3276, and a break there will put the October 10 peak of 1.3345 into view. The pairing bounced over 1.3260 into the close.

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