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By XE Market Analysis November 19, 2014 3:04 pm
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    XE Market Analysis: Asia - Nov 19, 2014

    The dollar was in a slow drift through the morning session, as the market awaited the release of the FOMC minutes. Traded ranges were relatively narrow, and for the most part familiar into the minutes, while on the data front, new home sales came in near expectations, and had little impact. The dollar subsequently fell broadly after the release of the FOMC minutes, though quickly snapped back to pre-release levels. EUR-USD spiked up to stop at 1.2600, before falling back under 1.2560, as USD-JPY fell to 117.50 from 117.70, before heading back to 117.75. With not much news in the release, the knee-jerk dollar reaction petered out in a hurry, and on net, after the dust settled, the greenback was just a touch lower than it was.

    [EUR, USD]
    After opening near 1.2530, EUR-USD ran through stops noted at 1.2550, on its way to 1.2570 highs. Another band of sellers was noted from 1.2580, which capped. The pairing's inability to stay under 1.2500 this week had seen some stale shorts covered on Wednesday, while position paring was a factor in morning trade, ahead of the FOMC minutes. The euro spiked up to 1.2600 highs after the minutes, though with little new to be gleaned, was quickly pushed back under 1.2560.

    [USD, JPY]
    USD-JPY continued its slow climb, again making new trend highs, trading to 117.77 in the morning session. The BoJ overnight downplayed the fact that Japan is in recession, though the markets are keenly aware that if growth and inflation don't live up to forecasts, more QQE will be in store. As a result, USD-JPY may still have room to run higher. The pairing did slip back under 117.40 after the FOMC minutes, though quickly posted new highs over 117.90 into the close.

    [GBP, USD]
    Sterling rallied on the BoE minutes to the Nov 5th-6th MPC meeting, which revealed an unchanged 7-2 vote to leave the repo at 0.5%, with members McCafferty and Weale continuing their dissent in favor of a 25 bp hike for a fourth consecutive month. Cable ran up to 1.5701 highs from 1.5590 in London. The market had been running a net short exposure to the pound ahead of the minutes, and there is likely potential for more position-squaring gains. Cable was steady through the N.Y. morning session, though briefly ran up to 1.5720 after the FOMC minutes, before heading back under 1.5700.

    [USD, CHF]
    Gold and Swissie have rebounded sharply as speculation about the Swiss gold initiative polling and Russian gold hoarding continue to rile the metals and FX markets. After rising to EUR-CHF 1.2025 session highs on an apparent drop in polling support for the Swiss gold initiative, the pair is right back down at 1.2009 again and in the SNB's cross-hairs. Russian CB governor yesterday announced the bank had bought 150 metric tons of gold this year and had propped up the metal over $1,200 before it sagged to $1,176.10 lows today and vaulted back to $1,192 again. Clearly the two issues are adding some volatility to the mix at the very least.

    [USD, CAD]
    USD-CAD peaked at 1.1356 in early trade, highs of the week, just ahead of parked offers at 1.1360. The soft commodities backdrop has been an anchor on the CAD of late, and oil prices are likely to remain soft, at least until next week's OPEC meeting, where there appears to be a slight chance the cartel will cut production. In the meantime, USD-CAD may bide its time between 1.13 and 1.14. The pairing touched 1.1311 lows after the FOMC minutes, though quickly bounced back over 1.1330.

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