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By XE Market Analysis February 13, 2018 3:18 pm
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    XE Market Analysis: Asia - Feb 13, 2018

    The DXY was marginally lower in N.Y. trade on Tuesday, dipping from 89.84 opening highs to 89.61, before heading back to 89.75. Wall Street was soggy through the morning session, though managed a moderate afternoon rally to close higher. Yields were little changed ahead of the key CPI report on Wednesday. EUR-US opened near 1.2330, and later topped at 1.2371. USD-JPY was supported over 107.50 for much of the session, later peaking at 107.78. USD-CAD was range bound, topping at 1.2624, while cable ran into sellers at 1.3900.

    [EUR, USD]
    EUR-USD peaked at 1.2371, a one-week highs, and has since found support into its 20-day moving average at 1.2339. The pairing is about in the middle of its two-week trading band, and still appears to be unwinding some of last week's losses, which came on safe-haven dollar buying amid the Wall Street meltdown.

    [USD, JPY]
    USD-JPY has bounced off of the five month low of 107.43 posted ahead of the N.Y. open, topping at 107.78 later in the session. The risk backdrop remained a bit soggy through the morning, though equity markets were relatively calm as compared to last week's volatility spikes, which has allowed for some USD-JPY short covering this morning. Support remains at the September 8 low of 107.32.

    [GBP, USD]
    Sterling more than gave back post-UK CPI gains versus the dollar. Cable posted a low of 1.3851, since settling higher, around 1.3900, after seeing a high of 1.3924 in the wake of the inflation data, which revealed a slightly firmer than expected headline and core CPI rates of 3.0% and 2.7%, respectively. Underlying uncertainty about the Brexit negotiation process, which was a point of emphasized contingency for the BoE last week in context of its upgraded growth forecasts, has been feeding a sell-into-rallies theme for sterling.

    [USD, CHF]
    EUR-CHF broke lower last week, leaving a four-month low at 1.1446. The cross has since settled in the lower 1.1500s. We expect directional bias to remain to the downside while the risk-off phase persists. The cross is seeing its biggest correction seen since the Swiss franc started to trend lower in mid last year, reflecting EUR-USD declines amid dollar outperformance and euro selling amid the ECB's evident disquiet about the extend of the euro's recent rally, which looks to have had a dampening impact on hawkish voices at the ctral bank. There is also some concern appearing in market research notes about the Italian election in early March, given the popularity of EU-sceptic Northern League.

    [USD, CAD]
    USD-CAD topped at 1.2624, after finding buyers under the 50-day moving average at 1.2575 during London morning trade. Soft oil prices continue to provide support to the pairing, with WTI crude remaining near the $59 level.

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