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By XE Market Analysis February 19, 2020 2:16 pm
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    XE Market Analysis: Asia - Feb 19, 2020

    The DXY topped at 99.71 in N.Y. on Thursday, making a 33-month high in the process. Warmer PPI, and a better than expected housing starts print provided the necessary Dollar support. EUR-USD printed fresh trend lows of 1.0782, down from near 1.0805 at the open. USD-JPY rallied sharply as risk-on conditions prevailed, peaking at nine-month highs over 111.20. USD-CAD gains were limited to 1.3254, up from 1.3213, as oil prices rallied. GBP-USD meanwhile, gave back gains seen following firmer U.K. CPI, falling under 1.2920, and down from near 1.3000 at the open. On deck for Thursday are U.S. jobless claims, Philly Fed and leading indicators figures.

    [EUR, USD]
    EUR-USD made new 34-month lows of 1.0782, and has printed 12-straight lower daily lows. A soft European economy, countered by mostly solid U.S. incoming data has weighed heavily on EUR-USD, which has fallen from 1.1097 highs since February 1. The Euro can be expected to remain in sell-the-rally mode going forward, with the next psychological support level now at the 1.0700 mark, with resistance seen between 1.0840 and 1.0850.

    [USD, JPY]
    USD-JPY topped at nine-month highs of 111.31 following the U.S. data, which saw PPI warmer than expected, and housing starts less weak than forecast. Risk-on conditions prevailed. The pairing had been on the rise since the Asian session overnight, as equity markets recovered some of Tuesday's losses. New coronavirus cases in Hubei province fell for the second day, which weighed on the risk-sensitive Yen to a degree, while stimulus out of China to offset the outbreak was a Yen-negative as well. Virus developments will remain a driver of JPY direction, along with general risk-taking levels.

    [GBP, USD]
    Cable fell back from highs of 1.3034 seen following the warmer U.K. CPI outcome. GBP-USD fell through the N.Y. session, dropping to 1.2920 after the London close. Stronger U.S. data lifted the USD broadly, at the Pound's expense. Focus now shifts to upcoming UK preliminary PMI survey data for February, due on Friday, which is expected to show an abatement in activity following January's post-election bounce.

    [USD, CHF]
    EUR-CHF remained near trend lows into the close on Wednesday, bottoming at 1.0610, after once again falling further into major-trend low territory on Thursday, printing a base at 1.0608, the lowest level seen since August 2015. The pronounced losses the cross has been seeing are partly a product of safe-haven demand for the franc, and partly as a lasting consequence of the surprising decision by the U.S. to add Switzerland to its list of currency manipulators last month.

    [USD, CAD]
    USD-CAD traded briefly under its 200-day moving average at 1.3215, bottoming at 1.3213 in early North American trade, before climbing over 1.3250. The lows came following warmer Canada CPI figures, though were largely offset by a firmer than expected U.S. PPI print. Better U.S. data supported later in the morning session. A rally in oil prices weighed on the pairing overnight, which fell from near 1.3260 levels seen at Tuesday's close. USD-CAD has not closed below its 200-day moving average since the end of January.

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