May 4, 2016

Brief Information about Foreign Exchange Rate Movement

 

 New York Market

 

EUR/USD retreated 0.31% to 1.1496. The euro dropped against the dollar after the comment made by Dennis Lockhart (Atlanta Fed) and John Williams (San Francisco Fed) did not rule out the possibility of June hike. From the Eurozone side, the European Commission downgraded growth and inflation outlook for the bloc economies, adding more pressure to the currency move. Inflation projection was trimmed to 0.2% for 2016 from 0.5% seen earlier and to 1.4% in 2017, increasing pressure for the ECB to meet its 2% inflation target.

 

GBP/USD retreated significantly by 0.94% to 1.4535. The sterling slipped to two-week low level against the dollar after UK manufacturing PMI for April fell to the lowest level in 3 years. At the same time, ICM published the ne poll result showing that 45% of voters favoring Brexit scenario, adding downside pressure for the sterling.

 

AUD/USD saw the biggest one-day drop of 2.39% to 0.748, the largest move since November 2011. AUD reacted to a surprised rate cut of 25bps to 1.75% after the policy meeting yesterday. A small majority of economists had called for unchanged policy rate.

 

 Asian Market 

 

Asian currencies mostly dropped against the dollar with the ringgit being the laggard with the daily loss of 1.71%. The pressure on the ringgit was added by the slide in oil price.

 

USD/JPY rebounded 0.17% to 106.59. The yen’s strength paused after it had touched 18-month high in the previous day following the regain in some momentum for the dollar. It should be noted that Japanese financial markets will be closed and reopened again on Friday. 

 

USD/CNY rose 0.27% to 6.492. The yuan initially was up against the dollar in Asia’s trading session as the PBOC continued to set the mid-point at a stronger pace while it was reported that state-banks intervened to narrow the increasing spread between the spot rate and midpoint.

 

USD/THB rose 0.31% to 34.96 from 34.85. USD/THB tested 34.85 several times before THB weakened in the overnight session following the comments from two Fed Presidents who did not ruled out the possibility of June’s rate hike. The comments increased the demand for the dollar and thus pressuring other currencies.

 

 

Today Market Direction at 8.30 A.M.

                   

KBank Technical Analysis

Morning

Rate

Support

Resistance

Trend (Major)

Today's Strategy

USD/THB (Onshore)

35.11

35.00

35.20

Sideway Up

Buy USD near support

USD/JPY

106.65

106.35

106.95

Sideway Up

Buy USD near support

EUR/USD

1.1503

1.1475

1.16

Sideway Down

Sell EUR near resistance

EUR/THB

40.39

40.10

40.65

Sideway

Neutral

JPY/THB

0.3292

0.3270

0.3316

Sideway

Neutral

                           

Foreign Exchange Market News
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