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By XE Market Analysis July 16, 2018 2:19 pm
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    XE Market Analysis: Asia - Jul 16, 2018

    FX trade was quiet in N.Y. on Monday, leaving the Dollar index little changed on the session. U.S. retail sales came in as-expected, while the Empire State index dipped, but not as much as forecast. Neither had much impact on the FX market. EUR-USD ranged between 1.1724 and 1.1695, while USD-JPY was stuck inside of 112.23-112.44. USD-CAD dropped to 1.3110 lows, despite a 5-plus percent drop in WTI crude prices. Cable reversed early gains, bottoming at 1.3217.

    [EUR, USD]
    EUR-USD found support into the 1.1700 level through the morning, before briefly dipping to 1.1695 lows after the London close. The lack of fireworks from the Trump/Putin meeting helped the USD slightly, though trade remained quiet overall. A close under the 50-day moving average, currently at 1.1712 could result in some follow through selling overnight.

    [USD, JPY]
    USD-JPY was confined to about a 20-point trading range since the N.Y. open, stuck between 112.22 and 112.44, and remaining under Friday's six-month high of 112.80. Talk of Japan exporter offers from the 113.00 level have capped gains since Friday.

    [GBP, USD]
    Cable firmed against the Dollar in London on Monday, though gave back those gains during the N.Y. session. The pairing topped at 1.3293 before falling back to 1.3217 lows. U.K. data this week will be make-or-break as far as the prospect for a BoE rate hike at the August MPC meeting is concerned -- which include average wage data (Tuesday), inflation figures (Wednesday) and retail sales (Thursday) -- especially with the Brexit-negotiation issue looking to be coming to a disorderly head.

    [USD, CHF]
    EUR-CHF printed seven-week highs above 1.1700 before pulling back. 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 manoeuvre is "necessarily" affected by the actions of ECB and Fed.

    [USD, CAD]
    USD-CAD printed 1.3110 intra day lows, coming from 1.3157 highs at the open. The move lower came despite WTI crude trading under $67.00 for the first time in three weeks. A generally softer U.S. Dollar put some downward pressure on the pairing this morning, which came in concert with the uncertainty surrounding the Trump/Putin meeting.

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