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By XE Market Analysis September 9, 2013 1:57 pm
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    XE Market Analysis: Asia - Sep 09, 2013

    The dollar continued its decline on Monday in N.Y., adding to Friday's post-jobs report losses. Uncertainty over Syria and Fed taper remained through the session, though Russia urged Syria to put chemical weapons under international control, if that would avert military strikes. This helped equities rally, but didn't lift the buck. There was no data to drive the FX market, though EUR-USD bounced to 1.3280 highs after opening near 1.3190. Cable traded over 1.5700, while USD-JPY was steady on either side of 99.50. Tuesday's U.S. calendar is empty again, though it appears for now, the dollar is set for more downside.

    [EUR, USD]
    EUR-USD cleared 1.3200 as dollar selling picked after the N.Y. open. There wasn't too much in the way of fresh news to digest, leaving the dollar on the defensive, which has been the case since it dropped over Friday's NFP release. Developments related to Syria will continue to influence in the absence of fresh economic data and ahead of next week's Fed outcome. EUR options at 1.3200 kept movement slow over the N.Y. cut, before it extended towards offers at 1.3230 and 1.3250. The pairing made its way to 1.3280 highs, before retreating some on talk of option backed offers into 1.3300.

    [USD, JPY]
    USD-JPY corrected lower after it failed to sustain the 100 level in Asia. Exporter offers were prevalent on top and momentum was also stymied by very heavy gamma exposure between 100.00 and 100.50 barriers. Technical watchers also suggest that USD-JPY could be vulnerable in the coming sessions as the Ichimoku cloud moves lower, though in N.Y., USD-JPY touched 99.35 lows before making its way back over 99.60 in very light trade.

    [GBP, USD]
    Cable traded into 1.5700 for the first time since August-21. Underlying dollar weakness added momentum on the way up, although GBP has enjoyed stable-to-firmer levels since the BoE policy decision last Thursday. Some market participants took the lack of BoE statement as a sign that it will accept the rise in market rates. Some MPC members did say in the August BoE minutes that higher market rates was justified. BoE Carney is expected to be scrutinised on the issue when he faces the Treasury Select Committee this week. Specs may try to take Cable beyond long-term resistance near 1.5750 ahead of Thursday's appearance, which could set the backdrop for a sustained run higher. 1.5752 marks the top of the range on June-17.

    [USD, CHF]
    EUR-CHF tripped stops through 1.2345 after 1.2350 bids gave way after the N.Y. open. The USD-CHF downturn through Friday's 0.9346 low weighed on the cross. Traders tipped light interest for safety, though this wasn't mirrored in other currencies. EUR-CHF should find buyers into 1.2330, but USD-CHF is looking more fragile since Friday's NFP data. Dollar losses could accelerate if September lows just under 0.9300 come into play.

    [USD, CAD]
    USD-CAD sliced through 1.0370, with earlier noted bids absent at the level. The pairing touched 1.0365 lows, with the move coming in concert with the strong Canadian permits outcome earlier. Corporate bids are reportedly sitting from 1.0350, which slowed further downside. The pairing settled inside of 1.0360-70 through the afternoon session.

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