2013-05-09 19:23 (UTC)
XE Market Analysis
The dollar moved broadly higher in N.Y. trade on Thursday, aided by reported real money dollar buying against a basket of currencies. Later in the session, USD-JPY stirred things up, slicing through the 100.00 mark, on its way to 100.72 highs. There was talk earlier in the session that China may reduce its foreign currency diversification, which likely helped the dollar in general on Thursday, but dealers said the latest yen move was more a function of stops than anything. The USD-JPY spike ultimately aided the USD versus the other majors, with the greenback closing at or near session highs across the board. On the data front, weekly jobless claims posted a fresh five-year low, which helped equity market sentiment, taking U.S. stocks to new record highs.[EUR, USD]
The dollar was buoyed by a real money order early in the session, reportedly against a basket of currencies. This lifted the USD index over 82.15. Stop losses added momentum, notably via EUR and Cable below 1.3100 and 1.5500 respectively, and the AUD move through 1.0200. EUR-USD dipped under 1.3090 in morning dealings, though sellers stepped in when USD-JPY spiked up 100 points through 100.70. The euro based near 1.3020 into the close.[USD, JPY]
USD-JPY made fresh highs over 99.60 in mid-afternoon, with a new round of buyers stepping in on the move over the previous peak of 99.40. Later though, the pairing spiked to 100.50, running straight through the figure, and extinguishing barrier options at 100.00. Earlier noted offers at 99.80 were reportedly pulled, and the ensuing vacuum resulted in heavy stops being triggered over 100.00. There was talk earlier that China may reduce its foreign currency diversification, which likely helped the dollar in general on Thursday, but dealers said the latest yen move was more a function of stops than anything.[GBP, USD]
Cable was supported under 1.5500 on U.K. GDP optimism after think tank NIESR said that it estimated GDP growth of 0.8% in the three months to end of April, while the economy expanded 0.3% in the three months to March, which is in line with the ONS reading. Cable edged up from 1.5486 lows to trade at 1.5515. Late dealings saw the pairing fall under 1.5430, in sympathy with USD-JPY's surge over 100.70.[USD, CHF]
EUR-CHF rallied in morning trade on reports of a broad dollar buying order hitting the market. The cross traded over 12330 in morning dealings, then spiked up over 1.2400 when USD-JPY took off higher. USD-CHF meanwhile, moved from 0.9360 to 0.9410, then later to just under 0.9500.[USD, CAD]
USD-CAD was steady between 1.0020 and 1.0045 through the North American session on Thursday. Bids remained at 1.0020, with option barrier defense expected ahead of 1.0000. The risk backdrop was fairly neutral early on, and offered few leads for the CAD. The CAD was helped a bit by the modest recovery on Wall Street, though talk of option barrier defense into 1.0000 strikes may limit downside from here.