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By XE Market Analysis December 7, 2018 2:51 pm
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    XE Market Analysis: Asia - Dec 07, 2018

    The Dollar fell in N.Y. on Friday following a softer than expected U.S. employment report. The DXY fell from 96.90 to 96.54 lows before steadying over 94.60. Wall Street was sharply lower again on renewed trade concerns, while Treasury yields slipped as well. EUR-USD peaked at 1.1413, from opening lows of 1.1365, while USD-JPY fell from 112.91 highs to 112.56 into the London close on risk-off conditions. USD-CAD slid to 1.3254 from 1.3400 on a solid Canada jobs report, and a sharp recovery in oil prices. Cable bucked the trend, falling to 1.2712 after topping at 1.2790.

    [EUR, USD]
    EUR-USD steadied on either side of the 1.1400 mark, after spiking up to 1.1413 highs, then 1.1374 lows after the U.S. jobs report. The pairing continues to find sellers over the 1.1400 level, a scenario that has been playing out for over a month now. More of the same into the weekend.

    [USD, JPY]
    USD-JPY has faded to 112.56, after touching 112.62 lows in the aftermath of the jobs report, then bouncing to 112.91 as stocks turned higher. Since then, Wall Street has retreated sharply, again putting pressure on USD-JPY. Next week's Japan data will include revised Q3 GDP, which is expected to be downgraded to -2.2% q/q from -1.2%, as Capex slowing impacted. The December MoF's business outlook survey is due, along with the December Tankan report.

    [GBP, USD]
    The Pound came under moderate pressure, which pushed Cable under 1.2750, though the UK currency appeared to have found a footing with the Sterling market remaining non-committal ahead of the parliamentary made-or-break vote on the government's Brexit deal. It continues to look highly likely that the deal will be voted down, which would immediately create potential for multitude scenarios in the coming weeks. This makes taking a directional bet, or hedge, difficult with regard to the Pound.

    [USD, CHF]
    EUR-CHF traded quietly on either side of 1.1300 in N.Y. on Friday, currently in consolidation mode after touching two-month lows last week.

    [USD, CAD]
    USD-CAD plunged to 1.3254 from near 1.3400 following the combined stellar Canada jobs report, and a softer U.S. employment outcome. As an added bonus for the CAD, oil prices surged higher on news that OPEC+ have agreed to a production cut. Wednesday's 1.3250 low provides the next downside target.

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