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By XE Market Analysis September 23, 2013 2:00 pm
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    XE Market Analysis: Asia - Sep 23, 2013

    The FX market was quiet in N.Y. trade on Monday, with the dollar mixed, but in narrow ranges on the session. EUR-USD dipped to lows near 1.3480, though a N.Y. close over 1.3500 may keep the uptrend intact. USD-JPY trolled along under 99.00 through the session, touching 98.65 lows. Other major dollar pairings were steady inside of familiar ranges. On the data front, the Markit September flash PMI came in a touch weaker than the previous month, though comfortably over the 50.0 boom/bust mark, at 52.8. Tuesday's U.S. calendar reveals home price data, consumer confidence, and the Richmond Fed index.

    [EUR, USD]
    EUR-USD touched 1.3480 after starting the session at 1.3525, opening the door for a retrace of the post-FOMC spike higher. Stops were taken out at 1.3490, though follow through was limited. We look for an eventual move to 1.3400-1.3380, which represents the pre-FOMC level. Weakness may have come from Draghi comments, who said the Bank remains ready to use any instrument, including long term refi operations to maintain monetary stance.

    [USD, JPY]
    USD-JPY ground out further losses since the N.Y. session got underway. USD-JPY's softer tone since the Asia session triggered selling by N.Y. based model funds. The defensive market tone has supported JPY, while weak longs cut back positions after the lack of upside last week. Appetite to sell JPY ran out of steam as better U.S. data put an October Fed taper on the table, while the U.S. debt ceiling is also a potential negative. USD-JPY losses could slow towards support into 98.50-60 and Friday's lows near 98.25. Note, JPY flows have been lower than usual due to the Japanese market holiday and there was an absence of Japanese buyers of USD and EUR, which were heavy on Wednesday and Thursday.

    [GBP, USD]
    GBP headed back to intra-day highs. A EUR-GBP move into 0.8415 lifted Cable to 1.6060. European accounts were reportedly selling EUR-GBP in anticipation of hedging related to EU farming subsidies that are expected to go through over the course of the week. A reserve manager sold ahead of 0.8450 in early trade and Cable found good support ahead of the 1.6000 pivot. Cable offers that were noted over 1.6100 last week have been lowered to 1.6070-80 and into 1.6100.

    [USD, CHF]
    EUR-CHF rebounded out of intra-day lows just under 1.2280. Macro funds used the break of the 200-dma as a buying opportunity as bids at 1.2275 and 1.2265 held and it traded back above 1.2300. USD-CHF, which hit trend lows of 0.9085, also recovered and headed back over 0.9100. Support in USD-CHF is noted between 0.9075 and 0.9065 ahead of option barriers from 0.9050.

    [USD, CAD]
    USD-CAD made little upside progress during the London morning session, stalling just over 1.0300 into the North American open. Offers were noted at 1.0330-50, which limited gains. U.S. names were sellers at the N.Y. open, though with a layer of bids reported at 1.0270, losses were limited to near 1.0275. There was little data to drive direction, though softer oil prices likely supported USD-CAD to a degree. Tuesday will bring Canadian retail sales data.

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