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By XE Market Analysis November 20, 2019 2:54 pm
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    XE Market Analysis: Asia - Nov 20, 2019

    The Dollar was mixed in N.Y. on Wednesday, though largely range bound. There was no incoming data to drive the market, though a Reuters report indicated the so-called "Phase one" trade agreement between the U.S. and China, may not happen this year. This sent stocks and yields lower. EUR-USD continued its consolidation from Monday's high, while USD-JPY slipped on the back of risk-off conditions. USD-CAD printed six-week highs over 1.3325, while Cable steadied over 1.2900. Thursday's U.S. data calendar features jobless claims, existing home sales, and the Philly Fed index.

    [EUR, USD]
    EUR-USD continued to consolidate recent gains, remaining range bound under Monday's near two-week high of 1.1090. The pairing bottomed at 1.1053 early in the session. Some safe-haven Dollar buying has been noted since Tuesday, with trade concerns, and potential for further issues between the U.S. and China, over Hong Kong the drivers. The relative outperformance of the U.S. economy over Europe should limit Euro strength going forward.

    [USD, JPY]
    USD-JPY recovered from the one-week low of 108.35 seen in London morning trade, rallying to near 108.70 at mid-morning. The bounce came despite the soft risk backdrop, perhaps prompted by buyers ahead of the 50-day moving average, which currently sits at 108.27. Further gains should be minimal going forward, as the trade picture shows little progress, and maybe even collapse, following the U.S. Senate's unanimous passage of a bill supporting human rights in Hong Kong, angering Beijing. Indeed, later in the session USD-JPY headed to session lows of 108.42 following a Reuters report indicating the so-called "phase-one" trade deal between the U.S. and China would not be completed this year. Wall Street headed sharply lower, leaving the Dow down more than 250 points. Treasury yields slipped as well, combining to weigh on the risk-sensitive pairing.

    [GBP, USD]
    The Pound traded softer over the last day, with both the dollar and yen outperforming on respective safe-haven bids. Cable bottomed at 1.2889 into the N.Y. open, later recovering to 1.2926. Political campaigning is in full swing in the UK ahead of the 12-December election. The latest update on Politico's poll tracker has support for the Labour Party shifting up a point to 30%, still some way behind PM Johnson's Conservatives, which has today also ticked up by a point, to 41%. As things stand, the Conservatives look to be well positioned to win the upcoming election and return to Parliament with a working majority under the UK's first past the post electoral system. We look for Cable to ply a well-worn trading band until the election.

    [USD, CHF]
    EUR-CHF was up for a fourth consecutive day, printing a one-week high at 1.1001. This puts in a little more space from the six-week low seen last Thursday at 1.0863. The cross has been lifted by Brexit news, with opinion polls showing a growing lead for PM Johnson's Conservative party. The two-and-a-half-year low seen in early September at 1.0811 has now swung back out of scope, for now.

    [USD, CAD]
    USD-CAD printed six-week highs of 1.3315 in London morning trade, since easing back to 1.3280 following in-line Canada CPI. The pairing has been supported by risk-off conditions on Tuesday and Wednesday, along with sharply lower oil prices. Reports that the U.S./China "phase-one" trade agreement may not happen this year, took the pairing to 1.3327 later in the session.

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