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By XE Market Analysis November 20, 2014 2:05 pm
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    XE Market Analysis: Asia - Nov 20, 2014

    The dollar traded mostly sideways in light dealings in N.Y. on Thursday, as modest gains on Wall Street and marginally firmer yields did little to help the greenback. Firmer core CPI data initially resulted in some USD buying, though gains were mostly unwound through the morning. Elsewhere on the economic calendar, a 21-year high Philly Fed index, and stronger existing home sales and leading indicators did little to pump up market activity. EUR-USD found buyers ahead of 1.2500, with gains limited to near 1.2570, as USD-JPY turned sideways just over 118.60.

    [EUR, USD]
    EUR-USD fell under 1.2510 from over 1.2530 after the warmer U.S. CPI outcome, though buyers quickly stepped in ahead of 1.2500, resulting in a rally toward 1.2570. The post-FOMC minutes peak of 1.2600 is the next upside target, though solid selling interest is reported into the figure. The pairing pulled back to 1.2525 into the London close, and later settled in around 1.2550.

    [USD, JPY]
    USD-JPY rallied to a new seven-year high for the fifth consecutive day in Asian trade, peaking at 118.97 before slipping back. The pairing opened at 118.20 in N.Y., managing highs of 118.41 after the CPI data, before falling to 117.74 lows. The dollar meandered on either side of 118 through the afternoon session.

    [GBP, USD]
    We remain bearish of sterling in the case against the dollar. We see that the U.K.'s recovery pace will continue to be eroded by economic stagnation across the Channel and slowing in some key emerging economies. Cable did move through resistance at 1.5700 in N.Y. on Thursday, peaking at 1.5738 before edging back under the figure. The modest rally likely came in concert with EUR-USD's move back over 1.2550.

    [USD, CHF]
    SNB's Zurbruegg fired a shot across the bows on the 1.20 cap vs the euro, which will be defended "with utmost determination" as the bank is prepared to buy an unlimited amount of FX and take further measures immediately if needed. The SNB board member also said that the bank has no plans to sell gold reserves. The remarks came ahead of the November 30 vote on the Swiss gold initiative that would force the SNB to raise gold reserves to 20% from roughly 8% currently, which has lost some support down to 38% of the required majority. EUR-CHF poked above 1.2020 to session highs of 1.2025 in wake of these remarks.

    [USD, CAD]
    USD-CAD blipped higher after the warmer U.S. CPI data. though the move was offset by firmer Canadian wholesale data. The pairing touched 1.1336 highs, before heading toward 1.1305. Oil prices were up approaching $75/bbl again, after holding support at $74.00 overnight, which was also somewhat CAD positive. Later, USD-CAD managed 1.1294 lows before bouncing back to 1.1315. Noted corporate bids in place from 1.1300 effectively stopped the pairing's modest slide this morning, though reports of 1.1350 offers now should keep gains limited going forward.

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