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By XE Market Analysis October 12, 2017 2:57 pm
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    XE Market Analysis: Asia - Oct 12, 2017

    The dollar perked up in morning trade in N.Y. on Thursday, aided by a warmer U.S. PPI outcome. As the session progressed however, the greenback fell back, leaving the DXY at 92.97 lows after opening at 93.05, and peaking at 93.22. EUR-USD based at 1.1829 after the data, before making its way to 1.1850 highs after the London close. USD-JPY held up early, peaking at 112.45, though later falling back to 112.13 lows. USD-CAD was range bound in the mid to upper 1.24s, while cable got a post-London close boost when EU Brexit negotiator said the U.K. may get a two-year "transition" period.

    [EUR, USD]
    EUR-USD opened in N.Y. at 1.1860 highs, and spent much of the remainder of the session slowly grinding lower, basing at 1.1827 after the London close. The pairing traded under both its 50- and 20day moving averages, before reclaiming the levels into the close. Dovish fallout from Wednesday's FOMC minutes continued to provide some support, though Friday's U.S. CPI report may end up being a weight on the euro should data come in warm, as expected.

    [USD, JPY]
    USD-JPY was range bound through the morning session, idling between 112.23 and 112.45 since the open. The relatively benign risk backdrop has kept the pairing stable, though following the dovish leaning FOMC minutes on Wednesday, gains going forward may be harder to come by. A close under the 20-day moving average at 112.31 will be a negative development, which could lead to a test of the 200-day moving average, which currently sits at 111.84.

    [GBP, USD]
    The pound had dropped on Brexit "deadlock", which is the word used by the EU's chief Brexit negotiator Barniar to describe the present stage in negotiations on divorcing terms between the UK and EU. Later though, cable surged through $1.3290 from 1.3175 after the London close, after reports that Barnier said that Britain may be offered a 2-year transition period for Brexit, jumping to 8-day highs prior to the news.

    [USD, CHF]
    EUR-CHF rallied to a two-week high at 1.1566 amid a broader pick-up in the euro after the Catalan leader de-escalating tensions with Madrid by calling for a pursuit of dialogue. Former EUR-CHF resistance at 1.1488-90 and 1.1500 now revert as supports. We expect the franc to remain on a generally softer path. The SNB stated at its quarterly policy review last month that it remained committed to ultra-accommodative monetary policy settings, and that the Swiss franc "remains highly valued," even in light of the relatively sharp weakening the currency saw from late July.

    [USD, CAD]
    USD-CAD traded briefly under its 1.2461 50-day moving average overnight, bottoming at 1.2433 in Asia, before rallying back to 1.2491 highs early in the North American session. Softer oil prices provided some support, though as crude rallied back following a bullish EIA inventory reort, USD-CAD eased back into 1.2460.

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