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By XE Market Analysis September 26, 2013 2:46 pm
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    XE Market Analysis: Asia - Sep 26, 2013

    The dollar firmed marginally in N.Y. trade on Thursday, as stocks advanced, and as Treasury yields edged up. Weekly jobless claims data were better than expected, and Q2 GDP was unrevised at 2.5%. FX dealings were fairly flat again, and major dollar pairings largely remained inside of well worn ranges. Back and forth continued in Washington on debt hike talks, though neither side so far appears to be budging. Any deal may well go down to the wire. EUR-USD moved briefly over 1.3510 at mid-morning, though succumbed to selling pressure, resulting in a low of 1.3472. USD-JPY traded either side of 99.00, though ongoing Japanese selling interest capped gains.

    [EUR, USD]
    EUR-USD saw some chop in ebbing from the 1.3520 area to a low of 1.3485 in early London before recovering the 1.35 handle once again. EUR sentiment soured following Eurozone money supply data that showed loans to non-financial corporations were down 3.8% y/y, while ECB Asmussen was the latest council member to re-emphasize that monetary policy will remain expansive. EUR-USD managed a brief pop over 1.3510 after softer U.S. home sales data, though was quickly met with sellers, taking the pairing later to lows of 1.3472.

    [USD, JPY]
    Japanese USD-JPY offers remained in place over 99.00, as the pairing was quickly pushed back under the figure after peaking at 99.13. With risk appetite generally firmer though, the yen stayed under some pressure, though gains going forward may be hard to come by, with sellers noted above at 99.30, 99.50, and 99.70. Afternoon pullbacks were limited to near 98.90.

    [GBP, USD]
    The pound dove in London on an unexpected downward revision to y/y Q2 GDP out of the U.K., where the final estimate from the ONS stats office confirmed the 0.7% q/q second estimate but chopped the y/y figure to 1.3% from 1.5%. After finding some footing near 1.6050, cable eased back to 1.6000 in the N.Y. morning session, where buyers returned. The pairing made its way back over 1.6035 in light afternoon trade.

    [USD, CHF]
    EUR-CHF ebbed under 1.2275. The cross has been trending lower over the last two weeks, having fallen from 1.2400-plus levels, though momentum has been waning in recent sessions, despite the break and close below the 200-day moving average earlier in the week. The market is reluctant to establish short positions at sub 1.2300 levels in light of the persistent downside failures under this level since April. SNB's Jordan also, earlier this week, reminded markets that the central bank remains fully committed to the 1.2000 limit peg, despite the backdrop of improving Swiss fundamentals.

    [USD, CAD]
    USD-CAD touched 1.0340 highs after finding good support into 1.0300 early in the session. Option backed bids from Europe were noted early on, while model funds were reported buyers from 1.0325. Offers remain at 1.0350, with stops above. Follow through has been lacking though, and more range trade is likely overnight.

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