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By XE Market Analysis September 11, 2017 1:24 pm
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    XE Market Analysis: Asia - Sep 11, 2017

    The dollar was broadly higher in N.Y. on Monday, as risk-on conditions returned. No missile/nuclear activity from N. Korea over the weekend, along with a less dmaging that feared outcome from Hurricane Irma combined to lift the greenback, stocks and Treasury yields. EUR-USD eased to lows under 1.1975 from opening highs near 1.2010. USD-JPY topped over 109.15, up from 108.50, while USD-CAD rallied on initially soft oil prices, and a Reuters survey expecting a weaker CAD over the next couple of months. Cable meanwhile, eased back under 1.3200.

    [EUR, USD]
    EUR-USD bottomed at 1.1973 after peaking at 1.2029 overnight. The dollar overall may remain under some pressure going forward. as the U.S. growth outlook may weaken for the short term, as hurricane damage is factored in. U.S. political fog may weigh on the greenback as well. For the euro, prospects for ECB tapering beginning in 2018 will support EUR-USD.

    [USD, JPY]
    USD-JPY benefited from the broad risk-on conditions on Monday, which came following the lack of N. Korea missile/nuclear activity over the weekend, and a less-than-feared outcome of Hurricane Irma. Stocks and yields are higher, both supportive of the pairing, which topped at 109.10, coming from near 108.50 at the open. Resistance comes in at 109.44, which represents the 20-day moving average.

    [GBP, USD]
    Sterling continued to trade mixed, today losing some ground to the dollar while gaining versus the euro and yen. Cable has rallied quite strongly over the last couple of weeks, but has during the same phase traded at eight-year lows versus the euro. We continued to advise caution with regard to medium- to longer-term outlooks with regard to the pound given the uncertainties about the Brexit process and evident stagnation that's already been seen in the UK economy. Cable has support is at 1.3152-53.

    [USD, CHF]
    EUR-CHF has seen some choppy price action in recent sessions, but the net takeaway is that the cross has been continuing to orbit the 1.1400 level, which has been the case for about a month now. Safe haven demand for the Swiss franc has ebbed and flowed over this period. SNB boss, Jordan, signalled last week that the central bank remains fully committed to its ultra-accommodative monetary policy settings, saying that he and his colleagues did not know if recent franc weakness, which is desirable from their perspective, would sustain. In the scenario that geopolitical tensions ebb back, we would by bullish of EUR-CHF.

    [USD, CAD]
    USD-CAD held above Friday's trend low of 1.2062, bottoming at 1.2100 into the open, before rallying over 1.2170. Risk-on conditions along with lower oil prices early in the session provided support. WTI crude traded under $47.30 early on, before recovering above $48.00 later in the session. The DXY recovered to 91.78 highs, after printing 33-month lows of 91.01 on Friday. A Reuters survey, which resulted in expectations for a weaker CAD over the next few months, likely provided support as well.

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