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By XE Market Analysis April 23, 2014 1:09 pm
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    XE Market Analysis: Asia - Apr 23, 2014

    The dollar started the N.Y. Wednesday session under modest pressure, though eventually recovered some ground against the euro and CHF. As has been the case this week, ranges remained narrow for the major dollar pairings. USD-JPY found support near the week's low, hovering near 102.20-40 after struggling over 102.50 for several sessions. EUR-USD peaked near 1.3855 in London trade, though was unable to match the level in N.Y., and eventually eased back toward 1.3810. On the data front, a nearly in-line flash PMI had little impact, while much softer than expected new home sales impacted the greenback only briefly. Yields were fairly steady, and equities dropped only modestly, breaking their six day win streak.

    [EUR, USD]
    EUR-USD managed just a 1.3812 to 1.3845 trading range in N.Y., moving to session highs after the soft U.S. housing data, though unable to attempt even a half-hearted test of London highs of 1.3854. Profit taking soon ensued, resulting in a minor pullback toward 1.3810. Bids remain parked at 1.3800, which has been a touch nut to crack of late. This said, with the ECB looking on, and not happy with further EUR gains, we think it is only a matter of time EUR-USD corrects lower. A move under 1.3770 will be needed to really shift sentiment.

    [USD, JPY]
    USD-JPY was steady between 102.15 and 102.40 since the N.Y. open, on lows of the week, after failing to test the 103.00 mark over the last few sessions. Focus now will begin to shift to this week's Japan CPI data, and next week's BoJ meeting, where the Bank's semi-annual growth update will be released. No rate action will be in the cards, though with further stimulus (consensus July) somewhat priced in, yen bears may be sidelined for a while. The BoJ is likely to keep its view the economy is recovering moderately, and with Japan's new sales tax less than a month old, new stimulus plans may be further off than some expect.

    [GBP, USD]
    Sterling has found its feet after taking a tumble in the wake of the BoE minutes, which didn't mark much of a departure from the already established dovish policy stance. This was a disappointment for some who had been anticipating a degree or two more of hawkishness in overall tone. Cable traded under 1.6790 into the N.Y. open, and eventually touched lows near 1.6760.

    [USD, CHF]
    EUR-CHF has settled around 1.2200 again, having recovered from the one-month low of 1.2142 that was seen last on Monday. The cycle low of 1.2104 was left untested. While situation in the Ukraine remains a concern, and this is a potential supportive factor for the CHF, the threat of SNB intervention into its 1.2000 limit peg is helping to deter franc buying.

    [USD, CAD]
    USD-CAD was a touch softer in early North American dealings, slipping under 1.1020 from London highs of 1.1047. Bids were reportedly in place at 1.1000, with offers at 1.1050. The pairing rallied 30 points to 1.1053 highs following the in-line Canada retail sales outcome. Selling noted ahead of the data was largely in anticipation of a better outcome, with those shorts covered after the release. Following the initial move higher however, the pairing pulled back into 1.1025, in the middle of its range, after being repelled by standing offers at 1.1050.

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