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By XE Market Analysis October 18, 2017 3:07 pm
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    XE Market Analysis: Asia - Oct 18, 2017

    The dollar weakened in N.Y. trade on Wednesday, leaving the DXY at 93.41 lows, and down from one-week highs if 93.80. Weaker U.S. housing starts data dented USD sentiment early on, and from there, the greenback drifted mostly lower. EUR-USD topped at 1.1794, up from 1.1745 opening lows. USD-JPY topped at 113.05 though quickly gave back the 113 handle, settling in near 112.90. USD-CAD moved lower on better Canada manufacturing data, bottoming at 1.2364. Cable meanwhile, steadied, meandering over 1.3150.

    [EUR, USD]
    EUR-USD rallied to 1.1794 intra day highs, reportedly tripping buy-stops at 1.1780, which was the earlier high. There was little follow through however, with the pairing drifting back to 1.1785, after not really giving Tuesday's 1.1800 peak much of a test at all. Range trade mentality remains in full swing.

    [USD, JPY]
    USD-JPY printed near two-week highs of 113.05, trading through its 20-day moving average of 112.46 in London, before reclaiming the 113 handle. Improved risk taking levels have supported, though option backed offers are reportedly in place from 113.00, which have so far capped gains.

    [GBP, USD]
    Sterling was near unchanged versus the dollar, with cable entrenched in a narrow range centred around 1.3160-70, having lifted out of a four-session low at 1.3140, tracking the price action of EUR-USD to a large degree today. The pound has been tarnished by warnings about Brexit from the OECD and various business groups yesterday, along with shaky political backdrop, with the ruling Tory party mired in infighting at a crucial time in Brexit negotiations, and with most pundits seeing an outside risk of there being another general election if the Tory party's fragile link with the Northern Ireland's DUP breaks.

    [USD, CHF]
    EUR-CHF rallied to three-plus week highs of 1.1579. Former EUR-CHF resistance at 1.1488-90 has been acting as a support. We have been anticipating an eventual return to 1.2000, which is the former trading floor of the SNB's, though this assumes that political tensions (Catalonia in particular) don't worsen, as the franc tends to find demand in the face of news developments that are threating to the political integrity of the Eurozone.

    [USD, CAD]
    USD-CAD fell to 1.2487 lows from 1.2525 after the stronger Canadian manufacturing data, though ultimately finding swupport into the 20-day moving average of 1.2467. Firmer oil prices limited gains from there, though traders will begin to look ahead to next week's BoC meeting, where no rate hike is expected.

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