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By XE Market Analysis November 8, 2013 2:47 pm
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    XE Market Analysis: Asia - Nov 08, 2013

    A much better than expected NFP print in October ramped up Fed taper expectations, which initially saw yields rise, stocks sell off, and the dollar rally. Treasury yields and the dollar stayed high through the session, though Wall Street for a change apparently took a look at economic fundamentals, instead of the Fed's punch bowl, and bought stocks up through the afternoon session. Given the firmer GDP data on Thursday, the better jobs report today, and stronger ISM prints of late, perhaps the U.S. economy is indeed on the upswing. EUR-USD sank to 1.3317 lows after peaking over 1.3425 at the open, while USD-JPY peaked over 99.20 after opening near 98.00, and held the 99 handle through the session.

    [EUR, USD]
    EUR-USD opened near 1.3420, though plunged to 1.3350 in the aftermath of the jobs report. Treasury yields stayed higher, supportive of the dollar. Intra day euro sell stops were noted under 1.3340, and were eventually taken out, on the way to the euro's low under 1.3320. Support seen coming in at 1.3300, though talk of large stops at 1.3290 was heard. They will have to wait until next week however, as pre-weekend short covering took the pairing over 1.3370 at the London close.

    [USD, JPY]
    USD-JPY touched highs of 99.22 after the jobs report, ramping up from around 98.00 at the N.Y. open. The pairing was unable to take out Thursday's 99.41 peak, though it did manage to hold the 99 handle through the close. Option backed offers are still seen in place from 99.50, while Japanese exporter selling is expected from 99.50 up to the 100 mark.

    [GBP, USD]
    Cable stops were flushed out below the 50-dma at 1.5991. There was a flurry of two-way action around 1.6000, but underlying dollar strength forced out weak longs, leaving it a short distance from Tuesday's low at 1.5949. Fundamentally, there are still strong arguments to remain long of GBP after U.K. data strength this week. Yesterday's steady hand from the BoE was to be expected after the BoE has already laid a well defined forward guidance strategy. It has another opportunity to refresh its position at next week's BoE Quarterly Inflation Report. The release will come on the same day as U.K. employment data.

    [USD, CHF]
    As was the case following the ECB rate cut and strong U.S. GDP report on Thursday, USD-CHF ramped up toward 0.9250 again after the strong U.S. jobs report. EUR-CHF found support under 1.2300 in early trade, and moved to 1.2320 as U.S. equities bounced higher. Following the ECB rate cut, the SNB has been put in a difficult situation, in fact SNB's Jordon said the ECB rate cut creates a "complex situation" and that the SNB needs to wait to assess the impact of the move.

    [USD, CAD]
    USD-CAD traded over 1.0500 in the aftermath of the better U.S. and Canadian employment reports, bouncing to 1.0503 from near 1.0450. Today was the first time since September 6 the pairing traded on 1.05. Offers seen in place at 1.0470 to 1.0490 were easily disposed of, and barrier options at 1.0500 were ultimately extinguished. We still maintain though, that in the bigger picture, as the U.S. economy improves, the CAD should benefit.

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