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By XE Market Analysis August 14, 2013 1:50 pm
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    XE Market Analysis: Asia - Aug 14, 2013

    After picking up some ground overnight, the dollar eased back in N.Y. trade on Wednesday, as very tame PPI data took Treasury yields a bit lower, denting USD sentiment in the process. Overall though, FX ranges were relatively tight, as the summer doldrums kept its grip on markets. EUR-USD opened near 1.3245, and made its way to 1.3270 highs into the London close. Despite the improved growth outlook in the EU, the euro remains reluctant to trade much higher. USD-JPY meanwhile, dipped briefly under 98.00 after starting near 98.30. Cable maintained the 1.5500 handle as improving U.K. economic conditions support. Thursday's U.S. calendar is packed, with CPI, jobless claims, the Empire State index, the Philly Fed index, industrial production, TIC flow data, and the NAHB housing market index all on tap.

    [EUR, USD]
    Only stops can inspire EUR-USD, which continued to tread a narrow uneventful range. It backed away from 1.3280 in the European morning, hit 1.3240 ahead of the N.Y. open and edged back over 1.3265. Stop losses are tipped on either side of the range. There are sell stops building below 1.3220 bids and larger in size at 1.3200 and 1.3180. Meanwhile, buy stops are noted behind Asian backed offers from 1.3295-00. The daily chart is still capping, but equally appetite to add to dollar longs is lacking in typical summer trading conditions.

    [USD, JPY]
    USD-JPY moved back above 98.00, after fading to 97.95 lows. Talk of Japanese bidding interest under the figure was heard, with speculative bids seen in place above the overnight base of 97.87. This said, good stops are seen building at 97.80 now. Offers higher up include corporate flows from 98.50 and option related activity is tipped from the 98.80 level up to 99.20. Bias for USD-JPY is higher since it held the 95.50 area last week and the dollar benefits from a pick up in U.S. yields.

    [GBP, USD]
    Cable traded higher amid macro fund demand. There was a brief period of sideways to lower action as profit taking went through midway in the European morning. The initial move over 1.5500 in the wake of the BoE minutes and U.K. employment data met option names and interbank types selling in front of yesterday's highs. However, from a fundamental perspective real money see good long-term value for sterling and Cable is close to 1.5520. Economic data continues to beat expectations and activity should continue to pick up while the BoE maintains the current policy stance. Cable managed 1.5547 highs in N.Y. with follow through buying coming from the dollar's generally soft tone.

    [USD, CHF]
    EUR-CHF edged back below 1.2400 as profit taking goes through ahead of the London close. EUR-CHF had held on to 1.2400 since early Europe and a few day traders have had trailing stops filled on the move lower. EUR-USD is still static around the 1.3250-60 area and this EUR-CHF move is a function of the USD-CHF fall from 0.9375 to 0.9345. USD-CHF is more likely to guide action in the coming sessions. A series of positive closes gave it momentum above the 200-dma at 0.9355 today and after a small correction we still see it higher in the coming sessions.

    [USD, CAD]
    USD-CAD eased to early session lows of 1.0325, after putting in a 1.0370 high in London. The softer U.S. PPI outcome was the main driver in morning trade, with gold prices flat and oil a touch weaker, neither having much impact on the CAD. Standing bids were noted down to 1.0300, with stops underneath the figure. Overall, activity remained subdued, and traders continue to see solid support into the 1.0300 level. The pairing ground its way to 1.-319 lows before turning sideways through the afternoon.

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