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By XE Market Analysis April 2, 2014 4:47 pm
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    XE Market Analysis: Asia - Apr 02, 2014

    The dollar firmed up through the N.Y. session on Wednesday, as a solid March ADP employment survey, and stronger factory orders helped U.S. Treasury yields, and Wall Street higher. EUR-USD also suffered from pre-ECB position squaring, as Despite some downplaying of ECB QE action this week, it appeared some would rather be safe than sorry holding euros into the meeting. USD-JPY posted trend highs of 103.88, helped by firmer yields and better risk taking levels, though with heavy sellers parked at 104.00, upside may be limited for now.

    [EUR, USD]
    EUR-USD traded breached the 1.38 handle twice in N.Y., though failed to hold both times. A EUR-USD N.Y. close over 1.3800 would have been bullish for the pairing said sources, and would open the door to Asian session buying. Stops are noted at 1.3830 now, though in the meantime, option and real money selling interest has been reported over 1.3800.

    [USD, JPY]
    USD-JPY dipped to 103.59 lows early in the session, though quickly found fresh buyers, as risk appetite perked up, as did Treasury yields. The pairing managed 103.88 highs, before running into rumored 104.00 barrier option defense. Japanese exporters are likely to be on top into the 104.00 region as well, so upside could be limited into Friday's U.S. employment report.

    [GBP, USD]
    Sterling has lost some shine following Tuesday's unexpectedly drop in the U.K. Markit manufacturing PMI report for March. A euro-driven rebound in EUR-GBP has also been at play. The market had been quite bullish on sterling over the last week, and while there were silver linings in the PMI report (the employment component was strong), the data presented a speed bump to market expectations. Bigger picture, Cable looks to be amid broad period of stasis, centred around 1.6500-1.6800.

    [USD, CHF]
    Switzerland's SVME manufacturing PMI disappointed, dipping to a 54.4 headline from 57.6 in February. This was below the consensus forecast of 56.7 and is the lowest in three months. There was little FX impact, and both USD-CHF and EUR-CHF remained rangebound.

    [USD, CAD]
    USD-CAD moved under 1.1010, coming off its overnight highs of 1.1042, and into a reportedly thick layer of bids into 1.1000, where corporate buying was noted. Significant stops were seen under the figure, with a break there likely to result in a move toward the March 6 low of 1.0955, though they were never threatened. The pairing again held the 1.10 handle, with strong buying interest reported under 1.1010. The pairing has rebounded over 1.1045, where range traders have been on the offer into the overnight high.

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