2013-05-30 17:52 (UTC)
XE Market Analysis
The dollar firmed up some in early N.Y. dealings on Thursday, though quickly lost ground following the early round of U.S. data, where Q1 GDP was revised down a tick, and jobless claims were higher than expected. Equities managed to keep gains through the session, though marginally lower yields and disappointment over the data took the dollar lower through late morning. In addition, month end profit taking likely took some wind out of the dollar's sails. The greenback eventually stabilized, though near session lows versus most major currencies. EUR-USD maintained the 1.30 handle, though talk of sellers returning over 1.3050 limited upside from the morning session. A similar story applied to USD-JPY, which while having difficulty staying over 101.00, found good Japanese bidding interest under the figure.[EUR, USD]
EUR-USD moved firmly over 1.3000 on more hedge fund unwinding of dollar long positions. U.S. data was the catalyst for dollar selling and EUR gained momentum after it cleared light offers around 1.2980. One U.S. account had standout interest from 1.2990 that helped the move up through 1.3010. This move gathered some momentum after last week's top of 1.3030 gave way, though sellers returned over 1.3050, limiting gains to 1.3060. Fundamentals are still EUR negative, but after yesterday's failure to sustain a move on 1.2800 the squeeze was on again.[USD, JPY]
USD-JPY eased back to test the 101.00 level in early trade, though initially saw some buying interest emerge into the figure. The pairing fell around 75 points since the dodgier U.S. data, though as stocks recovered from lows, the dollar found some interim support. The pairing later ground its way lower, basing under 100.70. Japanese bids were seen from 101.00 to 100.80, though were eventually filled in.[GBP, USD]
Cable turned higher after option backed bids emerged at 1.5110, while the dollar dipped after the U.S. releases. Cable eventually traded up to the 1.5220 region, and held the 1.52 handle through the N.Y. session. Cable's difficulty in sustaining higher levels had been due to residual month-end related demand, though the risk of an extended move higher increased after yesterday's rebound out of 1.5010. Longs are looking to force a close above 1.5200, which would be a short term positive and fuel follow through demand.[USD, CHF]
EUR-CHF hit lows around 1.2420 after the European open as fund names headed for safety on more Asian stock weakness. The CHF was also supported by better than expected Swiss Q1 GDP, although most of the action today is centered around stock moves. The cross rallied back over 1.2490 in early N.Y. trade, though as USD-CHF sagged after the softer U.S. data, the cross dipped back to the 1.2440 region.[USD, CAD]
USD-CAD recovered back over 1.0385 from lows near 1.0330, and followed the generally firmer USD tone early in the session. The greenback quickly turned lower after disappointing U.S. data, resulting in a USD-CAD move briefly back under 1.0300. Despite the softer Canadian IPPI and RMPI indices, the loonie managed some traction versus the USD. Sell stops at 1.0320 and again at 1.0300 helped the pairing lower, while endo f month position adjustments likely helped weigh as well.