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By XE Market Analysis August 27, 2013 2:29 pm
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    XE Market Analysis: Asia - Aug 27, 2013

    The dollar was broadly lower in N.Y. trade on Tuesday, as recently weak U.S. data tamped down Fed taper expectations. In addition, concern over Syria saw U.S. Treasury yields decline, weighing on the dollar. Tuesday's data slate was light, and revealed firmer house prices, and slightly improved consumer confidence readings. EUR-USD tried and failed to breach the 1.3400 level, though remained firm through the afternoon, while USD-JPY traded steadily lower under 97.10. Wednesday's U.S. calendar is light again, with just pending home sales and weekly EIA petroleum inventory on tap.

    [EUR, USD]
    EUR-USD moved to session highs in mid morning, session highs, coming up just short of 1.3400. The heavy Wall Street open didn't helped USD sentiment, though offers in place through the figure kept further euro gains in check. Stops are at 1.3400-10, but dealers report fresh selling interest waiting in the wings over 1.3420. EUR-USD may continue to struggle higher up due to the influence of Asian sovereign names. Large offers into 1.3400 were heavily tipped ahead of the Asia close and these have effectively put a top in place throughout the session.

    [USD, JPY]
    JPY demand accelerated after the N.Y. open. The move out of leveraged positions has tipped USD-JPY through support at 97.50-60 to intra-day lows at 97.25. USD-JPY's downturn is a symptom of JPY-cross weakness with the dollar holding up early on, on safe haven flows. USD-JPY continued to lose ground into the close, trading under 97.10.

    [GBP, USD]
    GBP was pressured in early trade as London names returned from the long weekend. Cable headed from 1.5550 to 1.5520 on EUR-GBP's move up through 0.8615, which was reportedly linked to M&A related activity. Vodafone's takeover of Kabel Deutschland was accepted and this weighed on GBP. Cable dipped briefly under 1.5500 in early N.Y. trade, though quickly made its way back to 1.5550 on the generally weak USD tone.

    [USD, CHF]
    CHF posted modest gains since the start of the week as risk aversion accelerated on Syria. EUR-CHF fell from 1.2350 on Monday and broke below 1.2300 since today's European open. The downturn in EUR-CHF slowed under 1.2300 as range players bought the dip into 1.2285, where local name demand emerged early last week. USD-CHF headed under 0.9200 in N.Y., basing around 0.9175.

    [USD, CAD]
    USD-CAD remained on a slightly higher glide path overnight, continuing to find support around 1.0500, and climbing to 1.0540 highs in London. More of the same range bound activity was the case through the morning. USD-CAD later flirted with the 1.0500 level, though bids at the figure held up through late in the session. Corporate and option backed interest was noted, and continued to 1.0495 lows. Stops will be a factor under 1.0490.

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