2013-04-09 21:05 (UTC)
XE Market Analysis
The dollar was largely rangebound in N.Y. trade on Tuesday, trading with a firmer bias versus the yen, while softening some against the European majors. The data calendar was light with just February wholesale data on tap, which had little if any market impact. Equities rebounded, which helped support EUR-USD, taking it to 1.3100 in afternoon trade. USD-JPY dipped under 98.75 into the London close, though settled over 99.20 in late trade. Cable moved over 1.5300, while USD-CAD was stuck in a narrow range.[EUR, USD]
EUR-USD probed offers into 1.3080 resistance after fixing flows elevated the EUR from the 1.3040 region, along with general dollar selling. EUR momentum is still skewed to higher levels after posting a series of higher highs and positive closes. EUR-USD was weighed on briefly by a Der Spiegal article, which speculated that the Greek government could force a bail in similar to Cyprus. Sellers didn't make much headway howeve, and the euro later peaking just over1.3100, after basing near 1.3030. Light stops were tripped at 1.3080, though dealers saw solid selling interest from 1.3100.[USD, JPY]
USD-JPY drifted back to the 98.75 region on dollar selling pressure after the N.Y. open. Japanese bids between 99.70 and 99.50 underpinned; and also where fund names were active during Monday's session. Short term accounts may be more encouraged to sell yen following the correction from overnight highs around 99.65. The Y100 level is still the near-term target, though a very large offer from an agricultural name is tipped just above 99.70, as well as long standing exotic structures.[GBP, USD]
Cable cleared 1.5300 after better than expected U.K. February production data. The rebound in February will add to expectations that overall the U.K. probably managed to avoid a triple-dip recession and helped Cable up from earlier lows of 1.5250. The short term technical picture rolled over at the London close on Monday after weak longs were stopped out on the move from 1.5300 back to Friday's consolidation zone at 1.5240. BoE's Fisher said he sees a need for more easing in a report being covered by Dow Jones. However, he maintained that FLS will support a pick up in lending and sees a glimmer of hope for the U.K. economy. Elsewhere, the U.K. trade deficit widened in February as exports fell despite the fall in the value of pound from the start of the year.[USD, CHF]
EUR-CHF has registered modest gains since the 200-dma held at 1.2130 at Monday's Asian open. Local names have used this level to establish long positions and were rewarded with a move back over 1.2180 today. The better risk backdrop and improved EUR tone cleared away short term offers, though the 1.2200 region is still congested with decent order flow and movement was choppy through this level today. SNB's Jordan maintained that the SNB is a long way from exiting from the CHF cap, which is not unexpected given the uncertainty that is still evident in the eurozone. Swiss data was mixed. The CPI reading missed expectations at -0.6% and highlighted the importance of the CHF cap to limit deflation risks. Meanwhile, Swiss retail sales came in at 2.4% y/y from 1.9% previously. USD-CHF has settled around the 0.9350-60 region after another failed attempt overnight to fill support from 0.9300-10. Offers are tipped from 0.9370 and ahead of 0.9400.[USD, CAD]
USD-CAD was steady at 1.0160-70 through the London morning, though has eased back to 1.0140 in light trade, as risk taking levels improved slightly. Bids remained in place at 1.0140 and under, while offers are said to be thick into 1.0200 now. As a result, another rangebound day was in store, as ranges ultimately held up through the afternoon.