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By XE Market Analysis September 25, 2017 2:54 pm
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    XE Market Analysis: Asia - Sep 25, 2017

    The dollar firmed up some in N.Y. on Monday, taking the DXY to 92.72 highs, levels last seen on September 5. The notable exception was USD-JPY, which fell from over 112.30 to under 111.50 as N. Korea equated Trump's recent comments to a declaration of war, saying it had the right to shoot down U.S. bombers. EUR-USD on the other hand, fell to near one-month lows of 1.1832, just above its 50-day moving average. Cable followed the euro lower, bottoming at a seven-session low of 1.3431. USD-CAD meanwhile remained on the firmer side, topping at 1.2369, despite four-month highs in WTI crude.

    [EUR, USD]
    EUR-USD faded to near one-month lows of 1.1832, finding support this afternoon ahead of its 50-day moving average, which currently sits at 1.1828. The uncertain German political landscape has weighed on the euro following Merkel's weakened status post-election. In addition, ECB chief Draghi seemed to defend the ECB's still very accommodative policy in a speech to EU lawmakers, revealing few signs that the key drivers at the central bank are willing to commit to an end date for QE yet.

    [USD, JPY]
    USD-JPY managed 112.33 highs in N.Y. trade, unable to test the overnight peak of 112.50 seen in Asia. N. Korea's lack of missile/nuke testing over the weekend supported the pairing, while the BoJ's affirmation of its ultra-loose monetary policy was a driver as well. Key support now comes in at 112.14, which represents the 200-day moving average. USD-JPY later fell through that level, crashing to 111.48 from 112.25 following comments from North Korea's foreign minister, who said Trump's recent comments amount to a declaration of war, and that Pyongyang has the right to shoot down U.S. bombers. Wall Street tumbled on the report as well.

    [GBP, USD]
    Cable slipped to seven-session lows of 1.3431 in N.Y. trade, following EUR-USD lower through the session. This follows a nine big figure rally from the late August low to the high that was seen at 1.3659 last week, fueled by the BoE's signaling that it is likely to take back the "emergency" post-Breixt rate cut of August 2016. Persisting Brexit-related uncertainties, and the fact that inflation readings are set to decline in the coming months, should see cable's upside limited going forward.

    [USD, CHF]
    EUR-CHF came off the boil after clocking a new 32-month high at 1.1623 on Friday. Political uncertainty in Germany took a toll on the euro, while N. Korea's assertion that Trump's recent statements equated to a declaration of war, brought the CHF's safe-haven bona fides into focus. The cross dove from 1.1560 to lows of 1.1412.

    [USD, CAD]
    USD-CAD has remained above tis 20-day moving average of 1.2303 through the session, after closing above the indicator for the past two-sessions. The pairing has topped at 1.2369, despite WTI crude's romp to four-month highs over $51.80. The pairing has been in buy-the-dip mode for a week now, following last Monday's speech from BoC's Lane, who appeared to signal a more gradualist approach to rate hikes ahead. Lane said the Bank is paying close attention to the impact of the stronger Canadian dollar and that possible changes to NAFTA are a key source of uncertainty for Canada's outlook.

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