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By XE Market Analysis February 11, 2014 3:24 pm
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    XE Market Analysis: Asia - Feb 11, 2014

    Fed Chair Yellen indicated tapering is likely to continue in measured steps at future meetings, in her prepared testimony, though added it's not on a preset course. This was enough to take the dollar initially higher, though was dovish enough to allow Wall Street to rally sharply. EUR-USD fell from 1.3680 to session lows of 1.3630 after the release of the testimony, though the euro regained some poise from there, heading back to the 80 level on reported Asian buying interest. USD-JPY moved over 102.65 from 102.35 before pulling back, but r\youching intra day peaks of 102.70 later on firmer Treasury yields.

    [EUR, USD]
    The dollar rallied following the release of Yellen's prepared testimony, as she kept ongoing tapering prospects alive. EUR-USD fell initially to 1.3653 lows from near 1.3680. The pairing later reversed back over 1.3670, after touching 1.3630 lows. Asian bids were reportedly in place from 1.3630 to 1.3600, and appeared to have put a solid floor under the pairing. From there, offers in place at 1.3690-00 capped things off.

    [USD, JPY]
    USD-JPY popped to 102.67 from 102.35 on the release of Yellen's testimony. Treasury yields moved up on the comments, supportive of the pairing, while risk appetite also put a floor under the dollar. After a brief pullback, USD-JPY managed highs of 102.70 into the close.

    [GBP, USD]
    Cable found support ahead of 1.6400 through the N.Y. session, making its way over 1.6485, after slipping to 1.6430 lows after Yellen's testimony was released. Cable's technical picture still remains tentatively bearish following the double rejection from forays above 1.6600 in late January and the subsequent breach (and continued hold below) of both the 20- and 50-day moving averages.

    [USD, CHF]
    EUR-CHF edged out a two-week high of 1.2257 in N.Y. on Tuesday, as the Swiss currency continues to unwind some of its safe haven premium. Better risk levels weighed on CHF following Yellen, as Wall Street scampered higher. The cross had been flirting with 1.2200 amid the backdrop of risk aversion in global markets, though the steadying in stock markets has lent the cross some support.

    [USD, CAD]
    USD-CAD touched 1.1011 lows, off its opening levels near 1.1070. The improved risk backdrop supported the CAD, as Wall Street posted solid gains in the aftermath of Yellen's testimpny. More corporate USD-CAD buying interest was reported at 1.1000, and layered into 1.0970.

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