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By XE Market Analysis November 21, 2019 2:56 pm
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    XE Market Analysis: Asia - Nov 21, 2019

    The Dollar was mostly higher in N.Y. trade on Thursday, supported by generally decent incoming U.S. data. Jobless claims were a touch higher, though the Philly Fed index showed improvement, and exiting home sales rose. Conflicting trade news kept risk-taking levels hemmed in, leaving Wall Street on either side of flat, and Treasury yields modestly higher. EUR-USD slipped to 1.10460 from just shy of the 1.1100 mark. USD-JPY remained heavy, though managed to bounce over 108.65 from lows of 108.50. USD-CAD bucked the trend, falling to 1.3270 following hawkish comments from BoC chief Poloz. Cable meanwhile, slipped under 1.2900.

    [EUR, USD]
    EUR-USD ran into sellers ahead of the key 1.1100 mark early in the session, peaking at 1.1097 before falling back to 1.1060 lows after the London close. Losses in GBP-USD helped the Euro lower, as cable slid from 1.2970 to 1.2898 on profit taking ahead of the psych 1.3000 level. EUR-USD's 50-day moving average, currently at 1.1043 is the next major support level, though recent declines in Treasury yields may limit downside potential for now.

    [USD, JPY]
    USD-JPY bottomed at six-session lows of 107.27 during Asian hours overnight, touching its 50-day moving average before bouncing to 108.70 early in the N.Y. session. Mixed signals on trade have seen the pairing move in both directions, with talk yesterday that a Phase one agreement would not be made this year, and this morning, reports that additional U.S. tariffs on Chinese goods set for a December 15 implementation, would be delayed. Bigger picture, until the trade situation is solved, USD-JPY is liable to play the 107.50 to 109.50 range seen for nearly a month.

    [GBP, USD]
    Cable fell from opening highs of 1.2970, later basing at 1.2893 after the London close. The Conservative party has maintained a commanding lead in opinion polls over two weeks into the official election campaign period ahead of the 12-December general election. From the market's perspective, this is seen as a positive for the pound, implying, as things stand, that PM Johnson's party will be returned to government with a working majority, and that the Brexit deal on the table will be implemented and the UK leave the EU in January, at which time the country will enter a transition period. In this scenario, another referendum on EU membership would be avoided. Until then, the Pound is likely to remain inside of well worn ranges.

    [USD, CHF]
    EUR-CHF was up for a fifth consecutive day, printing a one-week high at 1.1003. 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 fell back to 1.3270 lows, down from 1.3325 following comments from BoC chief Poloz, who threw cold water on rate cut expectations, saying "We think we've got monetary conditions about right." The CAD had been under pressure since the October 30 policy meeting, with a dovish statement fueling rate cut speculation. Since then, USD-CAD had moved from near 1.3040 to highs on Wednesday of 1.3327. The pairing dipped briefly below its 200-day moving average at 1.3275, though a close above the level will strengthen it as a support level.

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