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By XE Market Analysis April 8, 2015 8:28 am
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    XE Market Analysis: North America - Apr 08, 2015

    The dollar gave back some of Tuesday's gains overnight, sending EUR-USD to the high 108s and USD-JPY back under 120.00. A slightly dollar-bearish tone has developed into the release of the FOMC minutes this afternoon, where most expect a dovish leaning from the Fed. As a result, we look for the greenback to remain on a softer footing through the morning session.

    [EUR, USD]
    EUR-USD bounced from its 1.0804 lows, peaking at 1.0887 highs in London. The 20-day moving average of 1.0874 was breached briefly to the upside, though again provides resistance. Weaker than expected German manufacturing orders numbers kept the 1.09 handle out of reach, while the ongoing Greek drama also continues to provide a negative backdrop, even if the Greek government vowed to honor this week's IMF repayment.

    [USD, JPY]
    USD-JPY has settled back below 120.00 after failing to sustain gains above both here and the 20-day moving average at 120.10, which now marks resistance. The BoJ left policy unchanged at its policy review today, as was widely expected, which leaves the QQE program at Y80 tln per month.

    [GBP, USD]
    Sterling remains on a relatively firm footing against both the dollar and the euro as UK data should continue to show health economic momentum and tightening labour market conditions, though upside potential will likely be curtailed into the May-7 election. Cable peaked over 1.4950 from just over 1.4800 in late N.Y. trade on Tuesday.

    [USD, CHF]
    EUR-CHF has established a lower trading range below 1.0500. There have been some analyst notes in circulation highlighting further policy options the SNB has available to try and keep a lid on the franc (including cutting rates deeper into negative territory). The SNB said at its March policy review that the franc is "significantly overvalued and should continue to weaken over time," and that, in a shot across the bows of the market, said it will continue to take account of the franc rate situation in policy decisions and "remain active in the foreign exchange market, as necessary."

    [USD, CAD]
    USD-CAD hit a near six-week low at 1.2388 along with broader pressure on the greenback, approaching the bottom of the multi-month range around 1.2350. The much firmer oil bacldrop has helped the CAD this week, with WTI crude touching two-month highs over $54.00 on Tuesday.

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