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By XE Market Analysis September 24, 2019 3:28 pm
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    XE Market Analysis: Asia - Sep 24, 2019

    The Dollar headed lower in N.Y. on Tuesday, with losses coming on reports that the House Democrats are moving forward with impeachment proceedings against president Trump, based on reports that the president may have pressured the Ukraine president to investigate former vice president Joe Biden and his family's business dealings. Earlier in the session, softer consumer confidence and a weak Richmond Fed index dented USD sentiment. Later, as Trump tweeted he would release transcripts of his phone call with the Ukraine president, the Dollar recovered some of its losses. EUR-USD opened near 1.0995, later rallying to 1.1020, while USD-JPY fell from just over 107.70 to 107.02 lows, later recovering briefly to 107.40. USD-CAD ranged between 1.3274 and 1.3235. Cable meanwhile, navigated a 1.2503 to 1.2463 trading band.

    [EUR, USD]
    EUR-USD spent the morning session between 1.0994 and 1.1015, later climbing to 1.1020 highs in afternoon dealings. The highs came following reports that House Democrats are considering a special committee in order to attempt to impeach president Trump, which weighed on the Dollar overall. Bigger picture, with European growth fading and the U.S. economy still chugging along fairly well, EUR-USD is set to remain in sell-the-rally mode. Monday's 1.0966 low is now support, with the 20-day moving average at 1.1028 marking resistance.

    [USD, JPY]
    USD-JPY fell to better than two-week lows of 107.02 from pre-open highs of 107.79. The fall came on the back of a bout of risk-off conditions, with sliding stocks initiated by Trump bashing China on trade from the UN, then talk that House Democrats are considering a special committee to impeach Trump. The pairing fell through its 20-day moving average at 107.24, though found some buyers near the 50-day moving average, which currently sits at 107.06. USD-JPY later bounced over 107.40 following a Trump tweet saying he would release the transcript of his phone conversation with the Ukraine president. Wall Street remained lower, though cut its losses by more than half on the news, supportive of the pairing.

    [GBP, USD]
    Cable topped at 1.2503 in N.Y. morning trades. The gain came amid two developments. The most headline-hogging was the unanimous ruling by the 11 justices at the UK's Supreme Court that deemed Prime Minister Boris Johnson's suspension of Parliament to have been unlawful. This is a major story in the UK, already being heralded as a historic re-setting of the UK's executive, legislative and judicial branches in the context of the nation's unwritten constitution and parliamentary system of governance. It probably won't have a great bearing on the Brexit process, however, the ultimate course of which will be decided by the upcoming general election. The other main development today is the crystal-clear rebuttal by a number of key EU officials of Boris Johnson's plans for "alternative arrangements" for the Irish border than aim to do away with the need for the backstop clause.

    [USD, CHF]
    EUR-CHF fell to nine-session lows of 1.0845 lows on Tuesday. The cross has tracked lower since the SNB's policy announcement last week. The SNB kept both interest rates and its language on the currency unchanged, as widely expected. The policy rate and deposit rates were both left at -0.75% and the central bank repeated that that Franc remains "highly valued", while highlighting fragile markets and affirming the commitment to intervene in currency markets if needed. There was one surprise in the statement as the SNB changed the way the negative deposit rate is calculated with a new exemption threshold, designed to reduce costs for institutions as the global low-rate environment has "become more entrenched and could persist for some time yet". This means that the SNB followed the ECB, which also took steps to limit the impact of negative rates on banks, and the step may also prepare the ground for a mid-meeting move in Switzerland should Brexit developments turn sour.

    [USD, CAD]
    USD-CAD topped at intra day highs of 1.3275, up from opening lows of 1.3245. Weaker oil prices supported the pairing through the morning session, with WTI crude down under $57/bbl, and under post-Saudi attack lows of $47.37 seen on Monday. Resistance remains at the 200-day moving average at 1.3302, with good support expected at the 50-day moving average at 1.3227. The pairing later eased back to 1.3240 into the close.

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