2013-04-10 19:35 (UTC)
XE Market Analysis
The dollar was mixed to higher in N.Y. trade on Wednesday, though despite sharply higher equities, range trade was the norm. There was no data to move markets either, and for the most part, FX dealings were light and uneventful. Yields backed up to session highs, and equities rallied following the fairly healthy debate over the effectiveness and duration of QE evident in the leaked and early release of the FOMC minutes. Though they really didn't tell the markets anything new per se, the tone was fairly heated on the extent of the debate over QE, which has the bond market defensive again especially with stocks buoyed by global index gains. EUR-USD stayed inside of 1.3050-80, while USD-JPY meandered higher to 99.82.[EUR, USD]
EUR-USD broke through overnight lows of 1.3073, touching 1.3054 in light morning trade. Bids reported at 1.3050-40 were a supportive factor however, with the pairing moving back to 1.3080 after touching its lows. The early release of the FOMC minutes appeared to have been dollar positive, with USD-JPY edging over 99.50. EUR-JPY matched trend highs set during the European morning at 130.50 after it took off from 129.75 over the FOMC minutes.[USD, JPY]
USD-JPY bulls reloaded under 99.00 after remarks from BoJ Governor Kuroda triggered kneejerk losses. Strong support between 98.70 and 98.50 held without being threatened and the pair moved quickly back to 99.40. The move lower was exacerbated by system funds and Kuroda's remarks do not necessarily indicate any change in the way the BoJ will operate in the months ahead. Price reaction between the 99.50-70 region is going to be of interest for stale longs. The 99.70 area is a big resistance level and just above this level there is a very large offer from a Japanese name, as well as supply related to outstanding barriers up to 100.00.[GBP, USD]
Cable marked time above 1.5300 after yesterday's encouraging production numbers. NIESR also estimated that the economy grew 0.1% in March and revised up February's reading to 0.1%, which suggests that the U.K. will just avoid a triple-dip recession when official figures are released later this month. Longs target another test of resistance between 1.5350 and 1.5370, which would open up a potential run on 1.5400 and February-20 highs of 1.5448 in due course.[USD, CHF]
EUR-CHF has registered modest gains since the 200-dma held at 1.2130 at Monday's Asian open. Local names used this level to establish long positions and have been rewarded with a move back over 1.2200 on Tuesday. The better EUR tone has been a supportive lead, but since the cross move through 1.2200 an overhang of offers into 1.2220 capped gains. These good keep ranges tight as bids lower down are raised to 1.2175-80. USD-CHF is looking more vulnerable on further dollar selling and eyes a sustained move through 0.9300. Sell stops were tripped through 0.9300, but backed up a touch as buyers were noted ahead of short term support noted from as series of lows from late February at 0.9275-80.[USD, CAD]
USD-CAD was quiet through the North American session on Wednesday, posting a trading range of 1.0140 to 1.0164, though mostly inside of 1.0145-55. The CAD did not get much benefit from the firmer risk backdrop, while the lack of data on either side of the border tended to keep prices hemmed in as well. Bids are seen from 1.0130, while offers are in place from 1.0170.