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By XE Market Analysis October 24, 2019 2:44 pm
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    XE Market Analysis: Asia - Oct 24, 2019

    The Dollar was higher in N.Y. traded on Thursday, despite weak U.S. durable goods orders, mixed equities, and lower Treasury yields. Most of the USD gains came at the expense of the Euro and pound, as EUR-USD slipped under 1.1100 following a dovish ECB outlook, while Sterling slid on Brexit uncertainty, later recovering some as PM Johnson called a December 12 election. USD-JPY was range bound again, inside a 108.65 to 108.50 band through the session. USD-CAD meanwhile, fell to three-month lows of 1.3053, later rallying over 1.3090. Friday's U.S. economic calendar is light on Friday, though a busy week ahead will test the FX market's mettle. Aside from the FOMC meeting, and a likely 25 basis point rate cut, data will include consumer confidence, the ADP jobs report, advance Q3 GDP, manufacturing ISM, and of course, the October employment report.

    [EUR, USD]
    EUR-USD printed six-session low of 1.1093 into the London close, coming from 1.1153 highs seen at the start of Draghi's press conference. The ECB announcement and press conference were surprise-free, though with the QE program set to be fired up again, and the Bank saying the "Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge", this was enough to see some long Euro positions squared up, and the initiation of fresh shorts put on the books. Next support is at the 50-day moving average at 1.1035.

    [USD, JPY]
    USD-JPY has steadied under the one-week high of 108.75 posted in London morning trade, settling in above the 108.50 mark through the N.Y. morning session. Modest losses came as Wall Street turned into the red, and as Treasury yields slipped lower following the poor U.S. durable orders outcome. The pairing has traded inside of its 20-day moving average at 108.01 and 200-day moving average at 109.06 for two-weeks now, and will need to break either of those levels to bring fresh buyers/sellers back into the market. In the meantime, range-trade mentality will endure.

    [GBP, USD]
    Cable fell to six-session lows of 1.2788 into the London close, then, following the news that PM Johnson has called for a December 12 general election, the Pound rallied back over 1.2860. His government will table a motion in the House of Commons on Monday, which will require some Labour members to support it to get it through. In return for supporting the election, he promised more time to debate the Brexit deal. The pairing had been as high as 1.2926 in early N.Y. The EU is expected to agree to a Brexit extension before the weekend.

    [USD, CHF]
    EUR-CHF topped at six-session highs of 1.1042 in N.Y. on Thursday. The worst case for Brexit appears to be behind us now, though uncertainty of an election call may keep jitters going for now. . Odds for a crash-out no- deal have fallen sharply sine the start of the week, adding some weight to the risk-sensitive CHF.

    [USD, CAD]
    USD-CAD printed three-month lows of 1.3053 in early North American trade, down from overnight highs of 1.3086. Higher oil prices were the main driver of CAD strength early on, as WTI crude rallied over $56.30, levels last seen on September 30. In addition, predominately risk-on conditions supported the Loonie through mid-morning. As the Greenback recovered overall, USD-CAD made its way over 1.3090 into the close.

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