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By XE Market Analysis April 23, 2018 3:39 pm
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    XE Market Analysis: Asia - Apr 23, 2018

    The DXY peaked at 90.92 on N.Y. on Monday, with broad dollar strength seen on the eback of higher Treasury yields, decent incoming U.S. data, and the easing of trade and geopolitical tensions. The dollar index advanced to its best level since March 2. EUR-USD bottomed at 1.2208, a near two-month low, while USD-JPY topped at 108.72, a better than two-month high. USD-CAD printed a three week high of 1.2850, while cable touched one-month lows of 1.3929.

    [EUR, USD]
    EUR-USD traded to a low of 1.2208, resulting in levels last seen on March 1. The dollar overall fared well through the N.Y. session on Monday, with the broad move higher attributed to firming U.S. treasury yields, the easing of trade and geopolitical tensions, and generally supportive incoming data today.

    [USD, JPY]
    USD-JPY traded to a two-month high of 108.71, with the pairing on the upswing through the session and indeed, since last week, as trade and geopolitical concerns abate, and as the ramping up of U.S. yields versus near zero in Japan favors dollar buying. BoJ's Kuroda said on Saturday that strong accommodative stimulus will be needed for some time, also underpinning.

    [GBP, USD]
    Cable printed a one-month low at 1.3929 after the London close on Monday. A close below 1.4010-12 registers as the fifth consecutive down session, after making a 21-month high last Tuesday at 1.4376. The move today has been driven by dollar strength, which on from last week's pound underperformance after a run of sub-forecast data and after BoE Governor Carney last week threw cold water on what had been a near universal expectation for the central bank to deliver a 25 bp hike in the repo rate on May 10th.

    [USD, CHF]
    EUR-CHF pulled back from the key 1.2000 level on again on Monday, bottoming at 1.1926 as profit taking continued following the first time the cross has traded above the SNB's former trading floor (or franc cap), which it abandoned in January 2015 in the face of broad and unstoppable euro depreciation caused by ECB monetary stimulus. This is the fourth consecutive week, and the sixth out of the last eight weeks EUR-CHF has rallied, and the cross is now over 12.5% higher from the levels of mid last year. USD-CHF has concurrently ascended into three-month high terrain. The franc has been driven lower by the -0.75% Swiss deposit rate along with the widespread expectation for the SNB to remain strongly committed to negative interest rates until after the ECB starts tightening. The central bank's chairman, Jordan, said in an interview with the La Liberte newspaper this week that "it is not yet time to change monetary policy," adding that "we do not want to provoke an appreciation of the Swiss franc."

    [USD, CAD]
    USD-CAD printed two-week highs of 1.2850, trading above its 50-day moving average at 1.2782. The pairing bounced from 1.2775 following the weaker Canada wholesale trade outcome, and continued to find support following last week's "gradual" BoC statement, cooler CPI seen on Friday and the generally bid tone of the USD today.

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