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By XE Market Analysis September 25, 2019 2:59 pm
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    XE Market Analysis: Asia - Sep 25, 2019

    The Dollar perked up in N.Y. trade on Wednesday, helped by better U.S. housing data, and the apparent lack of a smoking gun in Trump's Ukraine transcripts. The DXY topped at two-week highs of 99.06, coming from early lows of 98.71. Wall Street rallied as well following Trump comments that a trade deal with China could come sooner than you think. That, plus firmer Treasury yields helped USD sentiment as well. EUR-USD fell to 1.0940 from over 1.0985, while USD-JPY topped at 107.88, up from near 107.30. USD-CAD peaked near 1.3290, later easing back under 1.3260. Cable bottomed near two-week lows under 1.2350.

    [EUR, USD]
    EUR-USD printed two-week lows of 1.0940, down from over 1.0985 just ahead of the release of the better new home sales data, and the release of the transcripts from Trump's Ukraine phone call. The housing data helped the Greenback, while the apparent lack of a smoking gun with regards to the Ukraine call, likely helped the Dollar as well. The Euro is now within sight of the September 12 low of 1.0927, and the 29-month low of 1.0926 seen on September 3.

    [USD, JPY]
    USD-JPY has rallied to highs of the week, topping at 107.88, from near 107.35 at the open, and getting its latest push higher from a Trump comment, who said a trade deal with China may be closer than you think. Wall Street moved to session highs on the comment as well, providing additional support to the Dollar pairing. The 108.00 level is the next upside target.

    [GBP, USD]
    Cable fell to near two-week lows of 1.2349 after the London close, extending the correction from the 2.5 month high seen last Friday at 1.2582. There didn't appear to be a specific catalyst behind Sterling's fall. The UK Parliament reopened following yesterday's historic ruling of the UK's Supreme Court that the government's decision to suspend it for five weeks was unlawful, and the debate in the House of Commons has been tumultuous. What is likely is that Johnson will repeat his call for a general election, which needs the support of two thirds of the House. The opposition is likely to stay with its tactical refrain from agreeing to an election, however, until the avoidance of no-deal Brexit on October 31 has been assured.

    [USD, CHF]
    EUR-CHF fell to three-week lows of 1.0832 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 rallied to 1.3288 highs, up from near 1.3250 into the North American open, in concert with WTI crude's fall to two-week lows under $55.90. Soft incoming global data, and reports that Saudi is ahead of schedule in getting its production back on line following the attacks have weighed heavily on oil prices of late. While firmer, USD-CAD remains inside of recent ranges, effectively hemmed in between its 50-day moving average at 1.3232, and its 200-day moving average at 1.3302. The pairing drifted under 1.3260 in light afternoon trade.

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