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By XE Market Analysis November 16, 2017 3:26 pm
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    XE Market Analysis: Asia - Nov 16, 2017

    Generally soft incoming U.S. data weighed on the dollar early in the N.Y. session on Thursday, as import prices were soft, jobless claims higher than forecast, and the Philly Fed index falling more than expected. Stronger industrial production later supported the greenback, though it was later in the session that saw the unit move to session highs. The dollar began moving broadly higher during the House tax vote, and took another step higher on its passage. EUR-USD faded from near 1.1775 to match earlier 1.1760 lows, as USD-JPY made its way from 112.80 to 113.05 highs. USD-CAD was weighed down early by better Canada manufacturing data, and later settled near 1.2740. Cable was steady on either side of 1.3200.

    [EUR, USD]
    EUR-USD edged down to match earlier N.Y. session lows of 1.1760 following the House passage of the tax reform bill. The pairing had traded as high as 1.1785 in the aftermath of squishy early U.S. data. There was little reaction to comments from Eurozone officials hinting that there may not be another follow up QE program (Mersch) and indicating that there shouldn't be too much focus on net purchases (Villeroy).

    [USD, JPY]
    USD-JPY is not feeling the love of sharply higher stocks, and firmer Treasury yields today, remaining under the 113.00 level, after printing a 112.74 low. Dollar weakness remains a factor ahead of the U.S. House vote on the proposed tax package, which even if passed, will not be the end of the fight. The Senate bill differs greatly, and it remains to be seen if the two houses can cobble together an agreement. House passage today gave the pairing a bit of a boost, lifting the dollar just over 113.00.

    [GBP, USD]
    Cable was near net unchanged in N.Y. on Thursday. Forecast-beating retail sales data out of the UK gave the pound a leg higher early, though Brexit-related noise seemed to have deterred follow-through buying. The Dutch parliament warned its government to start making serious contingency plans for a "no deal" Brexit, which is the latest sign of rising concerns about a lose-lose trade situation in a messy Brexit scenario. Goldman Sachs chief executive Blankfein also tweeted that "many" British CEOs wish for a confirming vote on the decision to leave the EU, to "make sure" that the consensus is still there. Cable settled around 1.3200 after lifting from levels around 1.3140-50 during the London AM session.

    [USD, CHF]
    EUR-CHF has traded to just shy of 1.17, following EUR-USD's upward path and a run of encouraging economic data out of the Eurozone. The 33-month peak seen in late October at 1.1712 has crept back on the radar screen. With the Eurozone gathering growth momentum, and seeming to have conquered existential political threats, we continue to anticipate an eventual return to 1.2000, which is the former trading floor of the SNB.

    [USD, CAD]
    USD-CAD steadied just under 1.2750 after falling from 1.2778 highs into the 8:30 EST mix of U.S. and Canadian data. The 20-day moving average, currently at 1.2755, continues to act as a magnet. With oil prices remaining soft, and signs of a general USD recovery through the session, downside was contained.

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