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By XE Market Analysis February 20, 2014 3:04 pm
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    XE Market Analysis: Asia - Feb 20, 2014

    FX trade was relatively quiet in N.Y. on Thursday, though the greenback managed to make up some ground versus most of the major currencies. Data was mixed, which included benign CPI, a weak Philly Fed index, and a stronger flash PMI outcome. EUR-USD maintained a 1.3688 to 1.3729 range, though it spent little time on the 1.36 handle. USD-JPY edged over 102.40, on the back of improved risk appetite, while USD-CAD took out the 1.1100 mark on corporate related buying. Cable was turned back at 1.6700, while USD-CHF inched over 0.8900.

    [EUR, USD]
    The euro took a dive on the underwhelming Eurozone PMI data. EUR-USD lost over 50 pips in breaching 1.3700, leaving a low of 1.3685 before steadying back around 1.3700 into the N.Y. open. The pairing peaked near 1.3730 in subsequent trade, though later moved briefly under 1.3700 again. The euro struggled earlier in the week as it failed to take out the 1.3800 level, and since then, it appears stale long positions have come undone to a degree.

    [USD, JPY]
    USD-JPY again found support under 102.00, and made its way from N.Y lows near 101.90 up to highs over 102.40. Better risk taking levels helped the pairing higher, though overall, dollar yen has largely traded 101.50 to 102.50 for nearly two-weeks. Dollar-yen eased in Asian hours on the back of the soft China PMI, though Japanese names continue to support on dips.

    [GBP, USD]
    Cable met good selling into 1.6700, which returned the pair to sub-1.6670 levels. The pound had been bid by remarks by BoE's Weale, who said that that a rate rise was likely by spring 2015 and that an earlier hike would be possible if wages started to rise quickly. We should point out that there has been scant sign of wages rising so far, which remain firmly negative in real terms despite the employment driven drop un unemployment of the last six months, while a rate hike by mid year 2015 is not far from prevailing expectations.

    [USD, CHF]
    EUR-CHF breached Wednesday's 1.2190, making 1.2186 before scaling back above 1.2200. The prevailing risk-off backdrop following PMI disappointments out of China and the Eurozone has supported the Swiss currency. The cross skirted both sides of the figure through the U.S. session, inside a very narrow range, though closed over 1.2200 on improved U.S. stock market performance.

    [USD, CAD]
    USD-CAD peaked at 1.1093 early, just above the previous February 11 high of 1.1090. Good sellers were in place ahead of 1.1100, with stops noted above the figure. Congestion is seen at 1.1120-40, with larger stops rumored from 1.1150. The pairing later took out the 1.1100 level, rallying to 1.111 highs. Corporate accounts were said to have been buyers on the earlier pullback under 1.1070, while stops were a factor on the move over the figure.

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