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By XE Market Analysis April 29, 2015 3:27 pm
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    XE Market Analysis: Asia - Apr 29, 2015

    The dollar plunged through the morning session, after much weaker Q1 GDP data dented sentiment, doubly so ahead of an FOMX announcement that was already expected to lean on the dovish side. EUR-USD opened just under 1.1000, and make its way to 1.1188 highs ahead of the Fed. The pairing eased back slightly ahead of the 14:00 EDT statement release, before falling back on the Fed's downgraded economic outlook, and on general profit taking. The greenback moved lower against the other majors through the morning, taking USD-JPY to 118.61 lows. The pairing briefly reclaimed the 119 handle after the Fed. USD-CAD traded the 1.19 handle, following the greenback's general path, though the CAD was helped by a sharp rebound in oil prices. Cable meanwhile stopped just shy of 1.5500, before revisiting the 1.5400 level into the close.

    [EUR, USD]
    EUR-USD peaked at 1.1188, a nearly two-month high ahead of the FOMC, with large stops reportedly driving the pairing higher on the move over 1.1100. Option backed accounts were also buyers on the way up. The FX market continued to price in a dovish FOMC statement, and continued to push back rate lift-off, which could, when coupled with improving Greece sentiment, see the euro run higher still. After the FOMC announcement, EUR-USD dipped from near 1.1150 to 1.1095, before bouncing back over 1.1130, though dollar short covering continued into the close.

    [USD, JPY]
    USD-JPY fell to 118.89 lows from 119.28 after the weak U.S. GDP data, recovered to 119.31 subsequently, before hitting intra day lows og 118.62 ahead of the FOMC. The pairing continued to fins support ahead of the one-month lows near 118.50, and rallied back over 119 into the close. Firmer U.S. yields through the session provided some underlying support as well.

    [GBP, USD]
    Sterling tagged along the euro's ride higher, with Cable trading to just under 1.5500, making two-month highs in the process and GBP-JPY foraying further into eight-week high ground. Ten of the last thirteen days have seen Cable make a higher high, illustrating the strength of the rally from sub-1.46 levels. Following teh FOMC announcement, cable sold off briefly under 1.5400, as broad dollar short covering stepped in.

    [USD, CHF]
    EUR-CHF rallied to levels last seen on March 26, peaking at 1.0508. Sellers emerged over the figure, taking the cross back into 1.0430 into the close. The SNB said last week it would reduce the number of institutions exempt from negative interest rates on sight deposits, and could open the door for more negative rates in the near future, perhaps to offset a potential Greece EMU exit. Shorts will be wary going forward.

    [USD, CAD]
    USD-CAD traded the 1.19 handle for the first time since mid-January, eventually basing at 1.1945, just under the January 20 low of 1.1952. The pairing moved lower with the greenback overall, though the CAD was aided by an upswing in WTI crude prices, which moved to four-month highs over $59.00/bbl from early lows under $56.60. After the FOMC, USD-CAD bounced to 1.2037 highs, as a broad wave of USD short covering hit the market.

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