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By XE Market Analysis July 9, 2018 2:11 pm
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    XE Market Analysis: Asia - Jul 09, 2018

    The dollar index recovered from 93.71 opening lows in N.Y. on Monday, later topping at 94.15 highs. A risk-on backdrop was supportive, resulting in sharp Wall Street gains, and firmer Treasury yields. EUR-USD backed away from three-week highs of 1.1790, falling back to 1.1741 lows. USD-JPY peaked at 110.85 from lows of 110.40 at the open. USD-CAD mostly stayed under 1.31 on firm oil. Cable fell to 1.3190 after U.K. foreign minister Johnson resigned over Brexit displeasure.

    [EUR, USD]
    EUR-USD eased back from its three-week high of 1.1790 seen early in the session, bottoming at 1.1741 into the London close. Encouraging data releases out of the Eurozone underpinned the pairing into the N.Y. open, though following three-sessions of gains, it appeared some profit taking was in order.

    [USD, JPY]
    USD-JPY has been firm from the N.Y. open, rallying to a near one-week high of 110.77 after trading flat overnight near 110.50. The risk-on backdrop has been supportive, as Wall Street moves sharply higher. For all intents and purposes however, the pairing has been trading between 108 and 111 since the beginning of May, and has shown no inclination to change that range anytime soon.

    [GBP, USD]
    Cable headed lower following the resignation of U.K. Foreign Minister Boris Johnson, who jumped ship along with Brexit Secretary Davis on the back of unsatisfactory Brexit outcomes over the weekend. GBP-USD fell to 1.3190 from near 1.3350 ahead of the Johnson resignation.

    [USD, CHF]
    EUR-CHF last week lifted above 1.1600 for the first time in three weeks amid a broader run higher of the common currency. SNB's Maechler said late last month that the franc "remains highly valued" despite the depreciation seen over the last year, arguing that "we are in extraordinary times and we are using unconventional measures. The comments affirm that the SNB is firmly on hold, with Maechler admitting that the SNB's monetary policy room for manouvre is "necessarily" affected by the actions of ECB and Fed.

    [USD, CAD]
    USD-CAD printed near three-week lows of 1.3066, with the pairing adding to last week' post Canada jobs report losses. Given the widely expected BoC rate hike on Wednesday, USD-CAD is likely to remain soft, especially if oil prices hold recent gains. Support comes in at 1.3010, which is the 50-day moving average. The pairing later bounced over 1.31.

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