2013-05-17 17:41 (UTC)
XE Market Analysis
The dollar got a boost from some strong Michigan sentiment and leading indicators on Friday, which reignited the sustainable U.S. growth meme once again. Stocks rallied, Treasury yields bounced, as risk appetite returned just in time for the weekend. EUR-USD ran into a band of sell stops around 1.2850 ahead of the data, taking the pairing to 1.2820 lows, before briefly dipping under 1.2800 in the aftermath of the data. USD-JPY meanwhile, moved to trend highs over 103.10, before settling in near the figure. Cable traded down near 1.5150, while USD-CAD moved over 1.0300.[EUR, USD]
EUR-USD fell to session lows after breaking through reported 1.2840 bids. There was talk of an Asian name on the bid at 1.2840-50, which was supposed to provide some support, though this never materialized. The euro ran though the level like a hot knife though butter, all the way to 1.2820. Later, after the stronger sentiment data, the pairing edged briefly under 1.2800 to touch 1.2797 lows, before moving back over 1.2820 in light afternoon dealings.[USD, JPY]
USD-JPY trended higher from under 102.50 at the N.Y. open, eventually ramping up over 103.10 new trend highs, following the positive U.S. data, and the pop in Treasury yields. The pairing breached barrier options at 10.300, on its way to highs over 103.10, though quickly retreated back under 103.00 on the back of noted Japanese exporter selling over the figure.[GBP, USD]
GBP-USD consolidated lower during the Asian and European morning sessions, now trading at 1.5245 bid, about 50 pips down on yesterday's London closing level. The downward bias has been imparted by USD gains versus the commodity bloc currencies today amid ongoing talk of Fed QE tapering. Solid U.S. data kept pressure on the pound, taking cable to eventual lows near 1.5150.[USD, CHF]
The Swiss currency gave back most of the gains it saw in the wake of the net-weak U.S. data releases on Thursday, which had inspired a bout of CHF-supportive risk aversion. A rebound in Asian equities, led once again by Japan, following much stronger than expected machinery orders helped revive animal spirits, which served to weight on the CHF. Further help came in the form of stronger U.S. data, which took USD-CHF to highs over 0.9760 from 0.9650. The cross rallied as well, moving toward 1.2500 from 1.2430.[USD, CAD]
USD-CAD touched 1.0313 highs after the cool Canadian CPI data, extinguishing barrier options at the figure in the process. The rebound in oil and equity prices slowed USD-CAD's rise, though bidding interest was reported from 1.0300 to 1.0270, which limited the pullback to near 1.0270 into the London close. The upside near term target will be the March highs, just over 1.0340. The CAD market dried up a bit early on Friday, ahead of a long weekend in Canada.