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By XE Market Analysis September 10, 2013 2:09 pm
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    XE Market Analysis: Asia - Sep 10, 2013

    The dollar was mostly easier in light N.Y. trade on Tuesday, though the euro was unable to advance to the 1.33 handle. USD-JPY did firm up however, moving over 100.40, and aided by EUR-JPY buying interest. The U.S. calendar was empty, though stocks managed another rally, mostly on the back of hopes for a diplomatic solution in Syria. Overall, FX activity was relatively light, and dollar consolidation may settle in in front of next week's FOMC meeting.

    [EUR, USD]
    Hedge funds lifted EUR-USD from 1.3250, which provided the impetus for a EUR-JPY break of 133.00 barriers. These are EUR-JPY's best levels since trend highs near 133.80 on May-22, though both momentum accounts and model funds have been actively adding long positions today since the U.S. advisory note released first thing in the European morning. EUR-USD was unable to take out the London high of 1.3275, peaking at 1.3232.

    [USD, JPY]
    USD-JPY found some of the resistance at 100.45 from July-24 highs and outstanding barriers at 100.50. We were tipped off on Monday that movement would be limited for a short period in USD-JPY over 100.00 due to long gamma positions between 100.00 and 100.50. EUR-JPY demand accelerated at the N.Y. open. July-24 highs near 132.75 gave way and stop loss activity boosted it towards option barriers at 133.00. The cross is in focus after a leading U.S. name has advised that a daily close above August-23 highs of 132.42 would be a very bullish development and is projecting much higher levels.

    [GBP, USD]
    Cable moved to intra-day highs over 1.5740 as longs position for a push on 1.5750. We think specs are positioning to clear out the major June top just above 1.5750 barriers ahead of Carney's testimony to the Treasury Select Committee on Thursday. GBP is still benefiting from the recent elevation in market rates amid an extended run of better than expected U.K. data. The move higher in Cable was supported by GBP-JPY and GBP-CHF gains. GBP-JPY is closing in on 158.00 after it broke mid-August 2009 highs around 157.50 earlier, while GBP-CHF edged over 1.4700. Cable's progress over 1.5700 was absorbed by an Asian central bank and real money offers during the European morning, while currently it's likely that option defensive selling is pushing back against buying interest.

    [USD, CHF]
    EUR-CHF regained topside impetus as it benefits on the positive developments on Syria. Risk appetite improved further in early N.Y. amid news that Syria have agreed to place chemical weapons under international control, based on earlier Russian proposals. EUR-CHF firmed up from 1.2370 and is bumping against recent resistance at 1.2400-05. There was positive influence from decent GBP-CHF demand and it rallied out of 1.4640 to 1.4700, where short dated options traded today, according to wires. The upturn in risk appetite also enabled USD-CHF to overcome yesterday's weak close and it is pushing its weight through offers from 0.9360-70.

    [USD, CAD]
    USD-CAD posted new three-week lows of 1.0331 earlier, after stops at 1.0350 were taken out. Corporate buying interest was prevalent through the morning under 1.0350, prompting a move back briefly above 1.0365. The better risk backdrop helped the CAD, however oil price weakness offset to a degree.

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