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By XE Market Analysis February 25, 2014 3:09 pm
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    XE Market Analysis: Asia - Feb 25, 2014

    The dollar was choppy through the session, though ended not very far from where it started. The major European currencies were extremely whippy at mid-morning, as the dollar rallied, then fell back fairly sharply versus the euro, pound and CHF. EUR-USD ran into sellers over 1.3760, and fell back t0 1.3715, as U.S. stocks turned higher. From there however, another dip in equities, plus a reported round of Asian (reserve manager) buying, saw EUR-USD back up over 1.3755. Cable round-tripped back to 1.6725 from 1.6640. Equities moved on either side of flat through the day, as Treasury yields pulled back a bit after softer consumer confidence data.

    [EUR, USD]
    Another upside EUR-USD fail came at mid-morning as the pairing again chickened out as it approached the 1.3800 mark. The euro posted intra day lows of 1.3715, with the greenback generally perking up some as Wall Street came off its worst levels. The euro's fall could have been linked to talk concerning potential for a Ukraine default. The chatter apparently came out of Russia, though was heard on Monday as well. After its sharp round trip, EUR-USD again lost moomentum over 1.3760.

    [USD, JPY]
    The dollar edged lower after the softer U.S. confidence print, taking USD-JPY to session lows of 102.01, from opening levels near 102.35. Once again, good support materialized into the figure, and the pairing later moved back over 102.25. There is little overall directional impetus in USD-JPY. BoJ policy would favour continued weakness, but the threat of China slowdown and its negative consequences on global stock markets is an offsetting yen-supportive force.

    [GBP, USD]
    Cable dove back under 1.6700 amid a sharp and broad dollar rebound. This helped shake some sterling longs out, which saw EUR-GBP rebound some. Cable had earlier touched levels above 1.6720 and EUR-GBP below 0.8220, which represented new highs for the week for the pound. As was the case with EUR-USD however, cable shot back up, and making fresh intra day highs of 1.6727.

    [USD, CHF]
    The CHF's fortunes will likely remained hooked up to risk levels for now, though for EUR-CHF, 1.2150-1.2250 is likely to hold up for quite some time. USD-CHF got caught up in knee jerk dollar buying, followed by a just as violent dollar sell-off, taking that pairing from 0.8855 to 0.8891 and back to 0.8860.

    [USD, CAD]
    USD-CAD found a base into 1.1050 in London trade, and since moved back up to 1.1080 in relatively light dealings. Moderate risk-off conditions supported since the London open, though offers from 1.1100 limited gains to 1.1096. The pairing looks to be in range trade mode, and the pairing managed to stick to a 1.1050-1.1100 trading band.

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