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By XE Market Analysis October 4, 2013 3:33 pm
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    XE Market Analysis: Asia - Oct 04, 2013

    FX trade was relatively subdued in N.Y. on Friday, initially due to the lack of employment report, which was postponed due to the U.S. shutdown. Major dollar pairings were nearly static through late morning, though into the London close, the unit posted some fairly broad, if modest gains. This came in concert with a leg up for equities, and firming Treasury yields. It appeared there may have been some position adjusting going on ahead of the weekend, in hopes of some agreement in D.C. This came after some perhaps slightly encouraging noises from Speaker Boehner, and more upbeat press reports on an agreement. EUR-USD faded to 1.3540 lows from highs over 1.3600, as USD-JPY touched 97.50, after inching under 97.00.

    [EUR, USD]
    EUR-USD found a small bid into 1.3580 early in the session, and edged back towards 1.3600 in quiet trade. The move under 1.3600 came from real money selling and talk of a supranational bank on top of EUR-GBP. Ahead of the London close, stocks, yields and the dollar firmed up broadly, likely as more positive noises from D.C. prompted some dollar short covering into the weekend. After struggling over 1.3600, EUR-USD slipped back to 1.3540 lows before steadying.

    [USD, JPY]
    USD-JPY continued to find support into the 97.00 mark, where talk of semi-official Japanese buying had made the rounds since yesterday. The pairing had dipped briefly under 97.00 numerous times over the past 24 hours, only to bounce immediately back over the figure. USD-JPY touched 96.99 in early trade, and quickly returned to 97.15. A move back over 97.40 later in the session took some pressure off, and kept large stops under 96.80 from harm.

    [GBP, USD]
    GBP losses slowed into the N.Y. session, with Cable finding buyers into 1.6030 and EUR-GBP is meeting a few sellers from 0.8475. A U.K. clearer forced Cable to 1.6033 lows just after the N.Y. open on an order related to today's fix. Although Cable posted very heavy losses in the European morning it is widely thought that EUR-GBP was the catalyst for the broad based GBP correction. Earlier in the week EUR-GBP moved into 0.8033, which is 1.2000 on the reciprocal rate and led to significant long-term corporate hedging and caught the market long of GBP.

    [USD, CHF]
    USD-CHF extended the rebound from under 0.9000 and cleared 0.9040 as weak dollar shorts were stopped out. The USD-CHF recovery enabled EUR-CHF to move up from 1.2235 to 1.2275. Apart from an early push lower in USD-CHF there was no further downside pressure. USD-CHF was in territory which could have been dangerous for EUR-CHF, though outstanding option barriers at 0.8950 and expiries at 0.9000 contributed to downside support and the market lacked the volume to force a break of range. Meanwhile, the .

    [USD, CAD]
    USD-CAD stuck between bids at 1.0320-10, and offers at 1.0340 through mid-morning, with activity overall very light. More of the same was expected on Friday, though the pairing later slipped back under 1.0300, despite the softer Ivey PMI print. Downside follow through was lacking however, with residual buying interest holding it close to the figure. The FX market overall was a bit hemmed in after a busy week.

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