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By XE Market Analysis November 18, 2019 2:51 pm
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    XE Market Analysis: Asia - Nov 18, 2019

    The Dollar fell in N.Y. trade on Monday, taking the DXY at two-week lows of 97.68, down from 97.96 highs seen at the open. There was little in the way of data to move the FX market, though reports that China may be having second thoughts on a trade deal knocked the Dollar, Treasury yields, and equities lower. China is reportedly thinking about holding out until the 2020 elections, according to a CNBC tweet, after President Trump declined to roll back tariffs. EUR-USD peaked at 1.1090, up from 1.1054 lows at the open. USD-JPY slipped with risk-off conditions, bottoming at 108.51 from over 109.00. USD-CAD eased from 1.3235 highs to 1.320, while GBP-USD was range bound near 1,2959, after posting near one-month highs of 1.2985 in London.

    [EUR, USD]
    EUR-USD rallied to an eight-session high of 1.1090, heading above its 20-day moving average for the first time since November 5. Strong Sterling gains dragged EUR-USD higher, following polls indicating further gains for Boris Johnson's Conservative Party. A soft European economy relative to the U.S., combined with a Fed now on hold, and an ECB with room to ease further, should limit EUR-USD gains going forward. The 1.1100 level marks interim resistance, with support at the 50-day moving average at 1.1041.

    [USD, JPY]
    USD-JPY slipped from 109.05 to under 108.55 following negative talk on trade early in the session. There were reports that China was pessimistic over agreeing to a trade deal with the U.S. The pairing had topped at 109.07 into the N.Y. open, a four-session high, on general risk-on conditions. U.S. equity futures have since given up earlier gains, turning mostly negative after the China report. The pairing later stabilized near session lows, as Wall Street steadied on either side of flat.

    [GBP, USD]
    Sterling rallied on weekend polls showing PM Johnson's Conservative Party having extended its lead in opinion polls. This strengthens the odds for the party to win the December-12 election and be returned to Parliament with a working majority, which in turn suggests that the Brexit deal on the table will be implemented in January, when the UK will then enter a transition phase through to the end of 2020. Cable rose over 0.5% in making a 17-day high versus the dollar at 1.2985. The UK currency also posted a new five-month high against the Euro. Politicos poll tracker now indicates the Conservatives with 41% support, up 2 points from Friday, with second-spot Labour some way behind with 29%.

    [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 1.0863 in Europe, later rallying back to 1.0894 highs in N.Y. on Thursday. Monday saw further gains, with a generally firmer Euro taking the cross to 1.0962.

    [USD, CAD]
    USD-CAD was lifted from the seven-session low of 1.3210 seen in London morning trade, topping at 1.3235 following reports that China remains pessimistic that a trade deal can be done with the U.S. Aside from the reining in of risk taking levels following the news, the CAD came under some pressure as WTI oil prices sold off under $57.00, from highs over $58.00 seen overnight. The pairing later dipped back to 1.3200 on general USD weakness.

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