The logged fresh lows in Asia before settling during in London trading. EUR-USD logged a 37-month high of 1.2459, extending the rally seen this week from the low 1.2200s, before settling in the lower 1.2400s into the ECB announcement. ECB policy is in sharp focus with market participants looking for further confirmation that the central bank is on course for QE tapering, though what tempering impact on hawkish impulses may have been caused by the magnitude of recent euro gains could prove to be a key driver for forex markets today. EUR-USD has support at 1.2389-90, and resistance at 1.2459-60. The USD index (DXY) clocked a new low at 88.81, which is the lowest levels since January 2014, since settling above 89.0. USD-JPY posted a new low for a third straight day, this making a four-month low at 108.73 before consolidating in the low 109.0s. Cable clocked a fresh post-Brexit vote high, and the dollar saw trend lows versus the Australian and Canadian dollars, along with most Asian currencies today. A Bloomberg report cited a South Korean policymaker affirming that "excessive" movements in USD-KRW are being monitored. One exception to the weak dollar theme is NZD-USD, which was slammed following a big miss in New Zealand CPI, which came in at 0.1% q/q versus the median forecast for 0.4% q/q.
[EUR, USD]
EUR-USD has settled below highs into the ECB announcement. The pair has settled in the lower 1.2400s after logging a 37-month high of 1.2459 during the Asia-Pacific session. The new high extends the rally seen this week from the low 1.2200s. The ECB's meeting today is a sharply in focus for market participants looking for further confirmation that the central bank is on course for QE tapering, though what tempering impact on hawkish impulses has been caused by the magnitude of recent euro gains will have on policymaking may prove to be a key driver for forex markets today. EUR-USD has support at 1.2389-90, and resistance at 1.2459-60, head of 1.2500.
[USD, JPY]
USD-JPY logged a new four-month low of 108.73. Broader dollar declines have once again been driving, with the buck making fresh lows versus a range of other currencies. EUR-JPY and other yen crosses have been trading comparatively steadily. Stock markets in Asia have come off the boil amid concerns about Trump's protectionist bent, and after his Treasury Secretary's verbal embracement, yesterday, of the weakening dollar trend. The greenback, which is down for a fifth consecutive quarter in what is the mot protracted decline since 2007-8, is posting its biggest monthly loss in over two years. There at signs that this is causing some consternation in Asia, with a Bloomberg report today citing South Korean policymaker as affirming that "excessive" movements in USD-KRW are being monitored.
[GBP, USD]
Sterling was standing as the strongest of the main currencies over the last week, as of the London open today, with the pound showing an outsized 2.6% gain versus the dollar, and a gain of 1.2% versus the euro and a 0.8% advance relative to the yen. The pound rallied strongly yesterday, concomitantly with UK yields following an unexpected 102k surge in UK employment, which was well up on the median forecast for a 13k decline. Cable has rallied for five consecutive weeks now, and this week marks its biggest weekly gain since mid September. Ahead of yesterday's labour market data, the pound has been underpinned in the wake of the EU and UK's deal on Brexit divorcing terms in December, and amid expectations for a post-Brexit transition period to be agreed upon by the two parties before month end. The backdrop has been eroding the Brexit discount that markets have been pricing in since the vote to leave the EU in June 2016. We have been advising trend following with regard to Cable.
[USD, CHF]
EUR-CHF has come under pressure this week, yesterday logging a two-week low at 1.1685. The move reflects a pricing in of risk that the ECB will express disquiet about the extend of the euro's recent rally at its policy meeting today, which may have a dampening impact on hawkish voices at the central bank. Before the current correction, EUR-CHF logged a 37-month high last week at 1.1833. The broad rally the cross has been seeing since mid last year, seen concomitantly with economic recovery in the Eurozone, alongside the apparent passing of the worst of the existential political threats to the Euro area, is now on pause. EUR-CHF would need to reach 1.2000 to fully reverse the losses that were seen after the SNB abandoned the franc cap in January 2015.
[USD, CAD]
USD-CAD has tipped to a four-month low of 1.2293. The move has reflected a broader decline in the U.S. dollar this week, with U.S. Treasury Secretary Mnuchin having added fuel to the down trend by welcoming the weakness as being good for trade. Focus will remain on the NAFTA front, where a new deal looks to be a probability. USD-CAD has trend support at 1.2250-51.
[EUR, USD]
EUR-USD has settled below highs into the ECB announcement. The pair has settled in the lower 1.2400s after logging a 37-month high of 1.2459 during the Asia-Pacific session. The new high extends the rally seen this week from the low 1.2200s. The ECB's meeting today is a sharply in focus for market participants looking for further confirmation that the central bank is on course for QE tapering, though what tempering impact on hawkish impulses has been caused by the magnitude of recent euro gains will have on policymaking may prove to be a key driver for forex markets today. EUR-USD has support at 1.2389-90, and resistance at 1.2459-60, head of 1.2500.
[USD, JPY]
USD-JPY logged a new four-month low of 108.73. Broader dollar declines have once again been driving, with the buck making fresh lows versus a range of other currencies. EUR-JPY and other yen crosses have been trading comparatively steadily. Stock markets in Asia have come off the boil amid concerns about Trump's protectionist bent, and after his Treasury Secretary's verbal embracement, yesterday, of the weakening dollar trend. The greenback, which is down for a fifth consecutive quarter in what is the mot protracted decline since 2007-8, is posting its biggest monthly loss in over two years. There at signs that this is causing some consternation in Asia, with a Bloomberg report today citing South Korean policymaker as affirming that "excessive" movements in USD-KRW are being monitored.
[GBP, USD]
Sterling was standing as the strongest of the main currencies over the last week, as of the London open today, with the pound showing an outsized 2.6% gain versus the dollar, and a gain of 1.2% versus the euro and a 0.8% advance relative to the yen. The pound rallied strongly yesterday, concomitantly with UK yields following an unexpected 102k surge in UK employment, which was well up on the median forecast for a 13k decline. Cable has rallied for five consecutive weeks now, and this week marks its biggest weekly gain since mid September. Ahead of yesterday's labour market data, the pound has been underpinned in the wake of the EU and UK's deal on Brexit divorcing terms in December, and amid expectations for a post-Brexit transition period to be agreed upon by the two parties before month end. The backdrop has been eroding the Brexit discount that markets have been pricing in since the vote to leave the EU in June 2016. We have been advising trend following with regard to Cable.
[USD, CHF]
EUR-CHF has come under pressure this week, yesterday logging a two-week low at 1.1685. The move reflects a pricing in of risk that the ECB will express disquiet about the extend of the euro's recent rally at its policy meeting today, which may have a dampening impact on hawkish voices at the central bank. Before the current correction, EUR-CHF logged a 37-month high last week at 1.1833. The broad rally the cross has been seeing since mid last year, seen concomitantly with economic recovery in the Eurozone, alongside the apparent passing of the worst of the existential political threats to the Euro area, is now on pause. EUR-CHF would need to reach 1.2000 to fully reverse the losses that were seen after the SNB abandoned the franc cap in January 2015.
[USD, CAD]
USD-CAD has tipped to a four-month low of 1.2293. The move has reflected a broader decline in the U.S. dollar this week, with U.S. Treasury Secretary Mnuchin having added fuel to the down trend by welcoming the weakness as being good for trade. Focus will remain on the NAFTA front, where a new deal looks to be a probability. USD-CAD has trend support at 1.2250-51.
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