2013-04-08 18:40 (UTC)
XE Market Analysis
FX trade was relatively quiet on Monday, with major dollar pairings sticking inside of fairly narrow ranges. EUR-USD tested the 1.3000 region briefly, though easily remained over the figure for most of the session. USD-JPY meanwhile, posted new trend highs over 99.30. The dollar bloc was a bit easier on the back of heavy equities, while sterling slipped under 1.5300 in light trade. There was no data to drive markets, so overall, interest was contained.[EUR, USD]
EUR-USD matched Friday's highs close to 1.3040 then turned a bit lower due to an overhang of good offers from option names and funds. Movement back into 1.3000 met short term support from U.S. interbank types that are still positioning for further upside following last week's series of positive daily closes. The string of disappointing U.S. data has also aided the EUR as stale USD longs continue to unwind positions. Buying momentum will pick up through the 1.3050 level, which are highs from late March.[USD, JPY]
USD-JPY moved into option strike territory at 98.50, where maturities in excess of $1 bln rolled off. An Asian central bank was a dollar seller from the 98.70 area and some Japanese interest went through in the 98.60s, which forced a pullback low of 98.40. The USD-JPY bias is still on the topside and a potential near-term move on 100.00. A recent Reuters poll said the majority of dealers expect 100.00 to print this week. However, good exporter hedging emerged at 99.00 during the European morning and long standing exotic structures at 100.00 are likely to be well defended on a 99 handle and could slow further yen losses.[GBP, USD]
GBP eased as short term accounts pared back overstretched positions in Cable, while EUR-GBP benefited from EUR buying interest on dips as Italian and Spanish bond yields dropped. The cross was lifted out of 0.8470 to trade just above 0.8500, which forced Cable into 1.5300. Cable is expected to meet buying interest on dips after last week's rebound out of 1.5035 following the BoE monetary policy decision and the upbeat services sector PMI data. There are hopes that the U.K. will avoid a triple-dip recession. Cable bids are noted at 1.5300, 1.5280 and Friday's consolidation zone at 1.5240-50.[USD, CHF]
EUR-CHF remained supportive around 1.2150 after it ran into buyers out of the 1.2130 area in Asia, where the 200-dma is noted. Local names had the standout interest, though there was also demand from a German account and a U.S. name to take it back to 1.2160 after the European open. In recent sessions upside movement into 1.2170-80 and 1.2200 has been absorbed by standing offers and the underlying EUR tone. However, the EUR has improved since the ECB policy meeting and the disappointing U.S. data last week, which may help EUR-CHF to shake of its recent heaviness. USD-CHF is relatively stable today around 0.9350 currently after Friday's drop to 0.9310, which followed the NFP data miss.[USD, CAD]
USD-CAD based under 1.0160 in early North American dealings, though moved back over 1.0210 in subsequent trade. Softer equities weighed on the CAD, while with the pairing pretty much filling the post-jobs report "gap" seen last Friday, decent technically driven buying was reported into the lows. Initial resistance is into 1.0235 (Friday's high).