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By XE Market Analysis September 9, 2019 3:33 pm
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    XE Market Analysis: Asia - Sep 09, 2019

    The Dollar was slightly lower through the U.S. session on Monday, seeing the DXY dip from opening highs of 98.34, to a low of 98.14. There was no incoming data to move the market. EUR-USD rallied from 1.1028 to 1.1068 highs, while USD-JPY fell from 107.18 to 106.93 before bouncing back to 107.15. USD-CAD fell from 1.3168 to 1.3139, before reversing higher over 1.3170. Cable steadied near 1.2350. Looking ahead, U.S. data this week will include CPI and PPI, along with retail sales. The ECB meets on Wednesday, and is expected to cut rates by 10 basis points to -0.50%.

    [EUR, USD]
    EUR-USD rallied modestly through the N.Y. session, opening at 1.1028 lows, then peaking at 1.2068 highs after the London close. Markets will look forward to this week's ECB meeting, where some sort of easing measures are expected, including a 10 basis point cut in the deposit rate to -0.50%, though beyond that, it remains unclear what else the Bank is willing to do. There may be room for market disappointment however, which would likely see the Euro rally, if only briefly. Until Thursday then, EUR-USD may remain in buy-the-dip mode.

    [USD, JPY]
    USD-JPY climbed to 107.18 highs, coming from opening lows of 106.93. The pairing saw sellers step in above the 50-day moving average, which stands at 107.14, effectively halting further gains. Risk-on conditions seen through the morning limited a steep downside reversal, though as Wall Street turned negative, the pairing re-tested the lows. Support now comes at the overnight base of 106.76.

    [GBP, USD]
    Cable steadied after rallying to over on-month highs of 1.2384, settling in around the 1.2360 mark. That extended the pound's rebound from last week's major-trend low to just over 3.5%, reflecting the market's descaling of its heavy net short exposure to the currency following a string of votes in the UK's parliament that culminated in legislation for Brexit to be delayed through to the end of January next year . Parliament will close at the end of today for five weeks after voting for a second time on whether to hold a snap election. The opposition have indicated that they will not vote for an election just yet, meaning that an election will happen sometime after October, assuming the EU agrees to a Brexit extension. Things are set to go quiet on the Brexit front for the next five weeks, until Parliament reopens.

    [USD, CHF]
    EUR-CHF has now rallied for four straight sessions, printing a one-month peak at 1.0962, extending the rebound from the 26-month low seen last Tuesday at 1.0811. The pickup in risk appetite in global markets, and reduced risk for a no-deal Brexit, has taken the pressure off the ECB as it heads into Thursday's government council meeting. This has helped float the euro and at the same time see an unwinding in the franc's safe haven premium (such as it is given the punishing -0.75% deposit rate in Switzerland).

    [USD, CAD]
    USD-CAD fell to levels last seen on July 31, basing at 1.3139. WTI crude rallied to better than one-month highs over $58.15, which weighed on the pairing. A risk-on morning session gave the CAD a lift as well, though as stocks later retreated, USD-CAD bounced to 1.3170 highs. Resistance is now at 1.3190, the 50-day moving average, with support at 1.3105, the July 31 low.

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