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By XE Market Analysis January 30, 2015 3:21 pm
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    XE Market Analysis: Asia - Jan 30, 2015

    The dollar was mixed in N.Y. trade on Friday, though a disappointing Q4 GDP print sent yields and Wall Street lower again. Despite that, EUR-USD headed down to the 1.12 handle, following reports that Greece's new government may not cooperate with the troika. The pairing based at 1.1282. USD-JPY meanwhile, didn't like the sour risk backdrop, as it fell to 117.30 lows, from session highs of 117.85. USD-CAD was the biggest mover of the day, as soft GDP numbers from both sides of the border saw that pairing fly to 1.2799 highs, after opening near 1.2650. Cable traded briefly under 1.5000.

    [EUR, USD]
    The dollar initially fell against the euro and following the softer GDP headline, which was offset to a degree by stronger consumer spending. EUR-USD moved from 1.1310 to 1.1335 before turning south again. Greece's Varoufakis said the new government cannot cooperate with troika, according to newswires. The finance minister added however, that a new arrangement will be sought with legitimate peers within the euro area. This news rattled the euro some, sending it eventually to session lows of 1.1282.

    [USD, JPY]
    USD-JPY held above its nearly two week low of 117.20 through the session on Friday, basing at 117.30. The pairing later moved back over 117.45, as Wall Street moved from its lows. Range trade is likely to remain in place ahead of further action from the BoJ, though should risk levels remain soft, USD-JPY may have some downside room. The January 15 low of 115.85 would appear to be the most obvious downside target, while a break of 119 will be needed to shift sentiment on the upside

    [GBP, USD]
    Cable leaked lower through the morning session on Friday, falling from 1.5087 highs printed after the softer U.S. GDP, and eventually falling to 1.4989. Bids emerged quickly under the figure however, and sterling ended back up near 1.5075 into the close.

    [USD, CHF]
    EUR-CHF posted highs of 1.0524 on Friday, which was the best level seen since the SNB abandoned the peg at 1.2000 on Jan-15, before running out of gas, and sliding back under 1.0400. The market remains illiquid and whippy. SNB's Danthine on Tuesday said that the SNB was still "fundamentally prepared to intervene in the foreign exchange market," and that Singapore's SGD basket policy "deserved closer examination." He also confirmed that the prospect of ECB bond buying was seen as a key risk factor when deciding to abandon the franc cap. He still sees the franc as overvalued, but didn't mention what would be an appropriate level.

    [USD, CAD]
    USD-CAD resumed its charge higher after the GDP misses on both sides of the border, taking the pairing through the April, 2009 high of 1.2715, to eventual highs of 1.2799. The CAD can't seem to get a break of late, as rate cuts and soft oil prices have weighed, and this morning, weak growth data coupling with two-plus year lows in natural gas. The March, 2009 peak of 1.3064 is the ultimate upside USD-CAD target now, with stops noted at 1.2800. The pairing later ran out of steam, falling back through 1.2700, trading into 1.2672 lows, as intra day stops were triggered at 1.2625 (the initial post-data high), and again at 1.2700. The pairing retraced an impressive 120-plus points from its 1.2799 high, though good support is expected into the 1.2660 region.

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