2013-04-18 20:23 (UTC)
XE Market Analysis
FX trade was choppy in N.Y. on Friday, where up-and-down equities, an uncertain economic outlook, and safety fears all combine to keep the dollar on a roller coaster path. U.S. economic releases weren't helpful to market sentiment, as jobless claims rose more than expected, the Philly Fed index headline was weaker, and leading indicators revealed a negative print. EUR-USD fell to session lows near 1.3025 after the data, and in conjunction with the low point for Wall Street. Later though as stocks recovered, the pairing bounced back to just shy of 1.3100. USD-JPY meanwhile, chopped around mostly over the 98.00 mark, while the greenback was net weaker versus the CHG and the pound.[EUR, USD]
EUR-USD experienced follow through selling under 1.3050 amid rumors that a French bank could be in trouble, which circulated on Twitter. EUR moved to its lowest levels on the session, which has also weighed on some French banking stocks. After failing to test 1.3100 longs have cut positions and bids at 1.3020 came into view, which kept yesterday's low of 1.3001 at bay. EUR-USD later popped over 1.3090 from under 1.3050, after the 1.3020 held earlier in the session. The pairing had tested the region more than once since the London open, and the move over 1.3050 apparently prompted some short covering interest out of London. Stocks have significantly pared their losses, also a euro positive.[USD, JPY]
USD-JPY gains faded as offers from 98.50 held for the third consecutive session. Into the N.Y options cut 98.00 strikes exerted a small influence following the failure to test the top of the weekly range around 98.70. The G20 meeting is keeping positions a little tighter than usual and after the heavy price chop this week more rangey trading conditions may persist. If Japan can dodge overt criticism at the G20 market participants are likely to build heavier yen short positions. In the interim, buyers are noted at 97.80 and 97.60 following the rebound out of 97.20 on Wednesday.[GBP, USD]
Cable hit session highs over 1.5310 after the dollar was shunted lower on reserve management flows. The uptick in U.S. jobless also weighed a touch on the dollar, though proprietary funds are still trying to keep Cable offered into 1.5300, where light option exposure is noted. A break over this level through short term moving averages at 1.5315 will clear our weak shorts, though a moderation in stock gains could effectively dampen the turnaround. Cable's rise fueled a test of EUR-GBP bids at 0.8540 after it pulled back from 0.8575 late on in the European morning on sterling short covering.[USD, CHF]
In the FX space, there was limited interest to add speculative CHF positions. EUR-CHF marked time close to 1.2150 after it could not overcome offers into 1.2165-70, while option related flows also tied prices up as the focus was on USD and EUR fluctuations. USD-CHF was rangebound in N.Y., though rather choppy, moving between 92.90 and 93.30. The dollar pairing has potential to push back beyond early April highs around 0.9370 as intra-day accounts look to buy the dollar on dips based on positive hourly studies.[USD, CAD]
USD-CAD slipped back to lows near 1.0230 in early North American trade, largely on the back of a more stable risk backdrop. Support remained at 1.0200, but larger stops were reported under the figure. Later, the pairing moved higher, as stocks stumbled yet again. Option related buying was reported early under the 1.0230 mark, helping the pairing back to 1.0260. Standing offers from 1.0280 on Wednesday are reportedly moved up to 1.0300 now, which may make the climb toward the figure easier should risk fade further.