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By XE Market Analysis December 17, 2018 7:04 am
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    XE Market Analysis: North America - Dec 17, 2018

    The Dollar has come under moderate pressure, with the currency retracing some of the gains posted on Friday. EUR-USD nudged moderately higher to around the 1.1340 mark, putting a little space in from the intraday low seen in Asia at 1.1299. The move reflected part Euro firmness, despite data showing a narrowing in the Eurozone trade surplus and a downward revision in Eurozone December HICP, and part Dollar softness. EUR-USD still remains within the range seen on Friday. USD-JPY drifted modestly high in making an intraday peak at 113.52 in Tokyo before drifting modestly lower during the European AM session. Equity markets have been mixed, gaining in Asia but declining in Europe. S&P 500 futures settled at near net flat levels after giving up earlier gains. Sterling found a footing after declining for three consecutive weeks on Brexit-related angst, which left a 20-month low versus the dollar last week at 1.2476. Cable lifted above 1.2600. UK Prime Minister has been continuing to plug away in her diplomatic effort to sweeten the Brexit deal, although it's clear that the EU will not renegotiate and there have been growing calls from within the UK for a second referendum on EU membership.

    [EUR, USD]
    EUR-USD has nudged moderately higher to around the 1.1340 mark, putting a little space in from the intraday low seen in Asia at 1.1299. The move reflects part Euro firmness, despite data showing a narrowing in the Eurozone trade surplus and a downward revision in Eurozone December HICP, and part Dollar softness. EUR-USD still remains within the range seen on Friday. EUR-USD has been in a bear trend since April, although downside momentum has abated in recent weeks. We still take an overall bearish view of the pairing. EUR-USD has resistance at 1.1347-59, and support at 1.1299-1.1300.

    [USD, JPY]
    USD-JPY drifted modestly high in making an intraday peak at 113.52, remaining comfortably within Friday's range. Equity markets in Asia poste moderate gains, as did S&P 500 futures. USD-JPY has support at 113.31-33, and resistance at 113.65. Bigger picture, the pairing has been oscillating in a broadly sideways range centred around 112.50-113.00 for over two months now. More of the same looks likely.

    [GBP, USD]
    Sterling has found a footing after declining for three consecutive weeks on Brexit-related angst, which left a 20-month low versus the dollar last week at 1.2476. Cable has settled to a narrow range near 1.2600. UK Prime Minister is continuing to plug away in her diplomatic effort to sweeten the Brexit deal, but it's "crystal clear" -- in the words of European Commission President Juncker on Friday -- that there won't be any renegotiation by the EU, other than a clarification of the deal on offer. This suggest that the Withdrawal Agreement from the EU is headed for eventual failure in the UK Parliament, and there has been growing calls by members of parliament for a second referendum on EU membership. We anticipate that the Pound with remain a sell-into-gains trade into the Parliamentary vote, which will be in January (data undecided, but before the legislated deadline of January 21). Cable has resistance is at 1.2633-34.

    [USD, CHF]
    EUR-CHF has settled in the upper 1.1200s after failing to sustained a brief move above 1.1300 last week. The cross remains comfortably above the two-and-a-half month low seen last Tuesday at 1.1225. The SNB remained firmly on hold at its quarterly policy meeting last week, continuing to rely on the combination of negative interest rates and the threat of intervention to limit appreciation in the currency in times of heightened uncertainty about the global outlook.

    [USD, CAD]
    USD-CAD has remained buoyant but below the 18-month high at 1.3445 that was printed on December 6. A rebound, or at least steadying, in oil prices after OPEC agreed on a 1.2 mln barrel per day output cut, along with sub-forecast U.S. jobs data for November, have curtailed USD-CAD's upside momentum. Overall, we continue to take a bullish view. The pair has resistance at 1.3445-50, and support at 1.3320-21.

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