CIBC FX Flows: FXWW

From the FXWW Chatroom: UsdJpy started the week softer from last Friday’s New York close 106.01. Not sure about the real cause but we think this could be due to the poor opinion polls published on Sunday. Report by Reuters said most Japanese think PM Shinzo Abe should bear some responsibility for the altered documents. UsdJpy printed 105.80, then recovered to 106.145. Nikkei Index extended losses beyond 1.2%, dragged UsdJpy back to 105.80’s. There has been talk of buying interests in the mid-105’s. Should expect more towards 105.00. Offers come in near 106.20. Decent option strike at 106.00, with some $2bn maturing on Wed March 21.

EurUsd traded lower on back of weaker EurJpy. The cross was sold after the Tokyo open, said to be for momentum funds, the cross fell from 130.20 to 129.715. EurUsd support comes in at 1.2250, coincidentally, there are notable option strikes expiring this week – total of Eur3.5bn worth of 1.2250 versus Eur2.2bn of 1.2300. In the daily chart, EurUsd trendline comes in at 1.2250.

Cable has been mixed this morning. Weekend news from The Sunday Times said Britain’s customs system will not be ready in time for the start of its new relationship with the European Union at the end of 2020. Another article said many economists said BoE could raise rates in May. Offers in the 1.3970’s but better reported at 1.4000. Downside trendline comes in at 1.3865.

AudUsd traded softer, amid weaker metal futures. Should expect some support surrounding 0.7700.

UsdCad took out 1.3100, there weren’t much offers and market rather orderly. From various reports, market has trimmed short UsdCad but not all. Our near term target is 1.3200 within reach.

Asians

Shares of South Korean carmakers Hyundai and KIA have fallen following reports that US is opening a probe on the carmakers’ air bags. With Kospi in red, UsdKrw propped up above 1070-handle.

UsdIdr touch higher on risk-off mode, Asian equity indices lower while UST yields up. Market players seen repositioning for event risk this week, presumably benefiting Usd. Our trader YT sees this UsdIdr pair trading higher purely due to expectations of FOMC, dot plot of future rate hikes and not reallocation of Rupiah assets.

New PBOC Governor Yi Gang spoke at news conference that China will keep prudent monetary policy and the financial sector stable. In Patrick Bennett’s opinion, the words are plain and simple, this is a continuation of policy.

UsdSgd feeling the squeeze, market is still hanging on to short position as the pair approaches resistance 1.3200-10 area.

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