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  • Writer's pictureMike Paterson

US Dollar lower as another week gets underway

Monday 27 April 2020

A combination of better risk sentiment and softer Greenback notable in Asia and early European trading as we start another week and move into month-end.

The Bank of Japan has eased monetary policy at its scheduled meeting which came as no surprise so had limited JPY weakening impact but Governor Kuroda's comments that he doesn't think the Yen level is causing problems has helped stem the JPY supply flows on the better risk and we've seen USDJPY down to test 107.00 again.

GBPUSD held 1.2320 on Friday after breaking up into 1.2380 and has since seen a spike up through 1.2400 in Asia helped by the better risk plays but so far capped around 1.2450 and re-sells duly made again up here. EURGBP is still managing to hold 0.8700 as we head into the usual month-end demand and that will not be a coincidence. Also being supported by large option expiries today. GBPJPY is holding in a 132.50-133.60 range still but been rallying to the top end again amid the better risk plays.

I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always.

USDJPY holding 107.00-05 yet again after the latest BOJ measures but finding sellers around 107.35 on rallies since. EURJPY held 115.50-60 with those large expiries at 115.60-65 helping to provide a decent base but since failing around 116.50 as USDJPY falls to test 107.00 again. EURUSD duly held the strong 1.0730 support and we've seen a decent rally once the pivotal 1.0780 area broke to look at 1.0850-60 again amid the softer USD/better risk combo. USDCHF capped around 0.9780 then 0.9760 as EURUSD rallied but still finding dip buyers around 0.9700-20 with EURCHF holding 1.0500 and rallying to test 1.0560 with the SNB still supporting as confirmed yet again by this morning's Sight Deposit data.

AUDUSD has based at 0.6350 and rallied once more to post 0.6469 on the USD supply/risk-on combo. GBPAUD has now broken down through another support line too at 1.9350 to post new recent lows of 1.9233 not seen since Feb and following the rally that peaked at 2.0850 in March.  USDCAD held 1.4020 and rallied strongly to look at the 1.4115-20 pivot again amid some general USD demand/softer oil but since back down to 1.4045 on the renewed USD supply. Good two-way business still expected.

Have a good week everyone and let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 08.45 BST

GBPUSD   1.2430

EURUSD   1.0840

EURGBP   0.8723

GBPEUR   1.1463

GBPAUD   1.9277

GBPCAD   1.7468

GBPJPY   133.32

GBPZAR   23.4482

GBPHKD   9.6370

USDJPY   107.24

USDZAR   18.8776

EURJPY   116.30

EURCHF   1.0545

EURHKD   8.4071

AUDUSD   0.6449

USDCAD   1.4052

USDCHF   0.9724

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