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By XE Market Analysis February 19, 2014 4:32 pm
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    XE Market Analysis: Asia - Feb 19, 2014

    The dollar was mixed in morning trade, following in-line PPI and soft housing starts data. EUR-USD climbed marginally to 1.3765 after opening near 1.3740, while USD-JPY moved up from 10190 to highs over 102.40. USD-CAD firmed on weak Canadian data, while cable recovered the 1.67 handle. Later, the greenback edged higher after the FOMC minutes, where a "few" officials saw a chance for rate hikes "relatively soon", with two saying evidence supports rate hikes in H2 2014. EUR-USD fell to 1.3735 from 1.3750, as USD-JPY moved over 102.45.

    [EUR, USD]
    EUR-USD struggled over 13760, unable to test overnight highs of 1.3773, before heading back under 1.3750. There has been talk of solid offers in place from 1.3780 to 1.3800, with defense of option structures cited. The euro had moved over 1.3800 on numerous occasions over the past several months, but has not been able to hold the level for more than a day or so. Given the history, 1.3800 will likely remain a tough nut to crack. Later in the session, the pairing fell to intra day lows of 1.3625 following the FOMC minutes.

    [USD, JPY]
    USD-JPY made its way from 101.85 intra day lows early in the session, and once it cleared, and held the 102 handle, was able to eventually rally to 102.45. There was again good Japanese bidding interest under the 102.00 level , which was apparently enough to stem losses. The pairing got a late boost following the FOMC minutes, where the dollar rallied broadly on interest rate hike talk and continued tapering in the minutes.

    [GBP, USD]
    Cable moved lower after U.K. data and the BoE minutes, with the unexpected tick higher in the official unemployment figure to 7.2% in December from 7.1% catching the market's eye. The pairing fell to 1.6640 lows into the N.Y. open, though recovered back to 1.6725, as the dollar stumbled in morning trade. Sterling slipped back to 1.6675 after the FOMC minutes.

    [USD, CHF]
    EUR-CHF edged under 1.2200 in N.Y. trade, in the aftermath of weaker U.S. data and a downturn in risk appetite. The cross did however, find strong bidding interest on the 1.21 handle, and closed the session back over 1.2200. Dealers will remain wary selling under 1.2200, as the SNB will be watching closely.

    [USD, CAD]
    USD-CAD rallied after the mix of data, where the weak Canadian wholesale data appeared to do the most damage to the CAD. The pairing initially moved over 1.1010 from opening levels near 1.0950, filling in offers noted at 1.0970-80, and 1.1000. USD-CAD later extinguished 1.1050 barrier options, which reportedly were relatively small in size. The pairing peaked at 1.1086 after the FOMC minutes. The February 11 high of 1.1090 will be the next upside target, while fresh corporate bids are seen coming back at 1.1000.

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