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By XE Market Analysis November 27, 2018 3:37 pm
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    XE Market Analysis: Asia - Nov 27, 2018

    The Dollar advanced some overall in morning trade on Tuesday, later giving back some of its gains. The DXY topped at twp-week highs of 97.50 before easing to to 97.31 lows. Softer U.S. consumer confidence briefly dented the dollar. Wall Street was down most of the session, though managed a comeback after NEC Director Kudlow said there is "a good possibility a deal can be made" with China on trade. EUR-USD was weighed down by threats of tariffs on German car exports, bottoming at 1.1278 before bouncing. USD-JPY topped at 113.84, while USD-CAD printed 5-month highs of 1.3281 as oil prices fell. Cable dipped to near two-week lows of 1.2726.

    [EUR, USD]
    EUR-USD turned lower, trading to 1.1278, and reversing the modest post-consumer confidence gains to 1.1310 seen earlier. The Dollar rose earlier following comments from Fed VC Clarida, who said further rate hikes are necessary, though talk of U.S. auto tariffs on Europe dented the pairing. Euro support is seen into the 1.1260 level, though a break under there will bring the 1.1200 area into focus.

    [USD, JPY]
    USD-JPY printed twp-week highs of 113.84, up modestly from earlier lows of 113.51. The paring of Wall Street losses provided support through the morning session, though gains may be limited going forward, as reports of Japanese exporter offers from the 114.00 level have been heard this morning.

    [GBP, USD]
    Cable made lows of 1.2726 after the London close. Various factors weighed on the pound today, though they all boil down to one issue: Brexit. Northern Ireland's DUP, to which PM May's Tory party depends on to operate as a minority government, reaffirmed that it "cannot support" the deal, and the Labour party, which is the principal opposition, is also shaping up to be against it. Two days after the EU-27 approved the deal, and two weeks ahead of the expected date for Britain's parliament to vote on it, Prime Minister May looks to be short of 60 votes to get the deal over the line. While a no-deal crash-out scenario is unlikely, the risk is that political turmoil will persist in the event that parliament votes May's deal down.

    [USD, CHF]
    EUR-CHF fell to 2-month lows of 1.1276 in N.Y. on Tuesday. A falling EUR-USD weighed, as the U.S. threatened 25% auto tariffs on European exported vehicles. Ongoing wrangling between Rome and Brussels about Italy's budget had weighed on the common currency lately, reviving the Franc as a safe-haven currency. There has also been signs of flagging economic growth momentum in the Eurozone. EUR-USD has support at 1.1300-05.

    [USD, CAD]
    USD-CAD moved to five-month highs of 1.3329, up from opening levels of near 1.3240. WTI crude's inability to reclaim the $52 handle prompted USD-CAD buying in morning trade, while later, as oil fell under $50.50, the CAD came under further pressure.

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