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By XE Market Analysis July 25, 2013 2:08 pm
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    XE Market Analysis: Asia - Jul 25, 2013

    FX activity was very light in N.Y. on Thursday, though the dollar faded fairly broadly through the session. Firmer weekly jobless claims and flat non-transport durables weighed on risk taking levels, resulting in a weaker greenback, and softer equities in morning trade. EUR-USD opened just under 1.3200, and made its way to highs over 1.3250 in early afternoon dealings. USD-JPY found support into 99.50, after having trouble rallying out of 99.75. The dollar bloc was firmer, as was sterling and the CHF. Friday's U.S. calendar is thin, with just the final July Michigan sentiment index, and June pending home sales data.

    [EUR, USD]
    EUR-USD opened the N.Y. session near 1.3200, peaking at 1.3238 in the aftermath of the softer U.S. data. The pairing edged up over 1.3250, after breaking the previous intra day high. The minor uptick reportedly came as weak shorts ran for cover. There was little subsequent follow through, with the pairing idling back to 1.3245 into the close.

    [USD, JPY]
    USD-JPY benefited from the underlying trend in Asia. U.S. fund names and Japanese importers forced a move back up yesterday's highs around 100.45. However, it ran into strong offers and profit taking set in and it reverted to the lower end of the recent range at 99.85-90 into the N.Y. open. Higher U.S. yields should keep USD-JPY close to 100.00, though the greenback was heavy overall in N.Y. dealings, and USD-JPY settled in near 99.50.

    [GBP, USD]
    GBP longs booked profit on U.K. Q2 GDP data, which met expectations at 0.6% q/q and 1.4% y/y. Cable traded at 1.5374 highs ahead of the release and then dropped to 1.5264 into the N.Y. open. EUR-GBP edged out lows of 0.8590 pre-data and then moved back through 0.8640. Cable should hold up based on the improving fundamental backdrop, but recent topside moves have met very strong resistance from 1.5390 and this may indicate a near-term top is building.

    [USD, CHF]
    USD-CHF recovered from the 0.9350 region to trade back into 0.9390 as dollar buying picked up in London. The market shrugged off yesterday's series of small stimulus measures by China and even with relatively firm European data there has been no follow through for risk taking. EUR-CHF continued to consolidate between 1.2300 and 1.2400 amid competing EUR and USD flows. USD-CHF met selling pressure on upticks, and eventually made its way through 0.9350 support, to lows under 0.9315.

    [USD, CAD]
    USD-CAD traded about a 30 point range since the North American open, finding buyers into 1.0275, and sellers over 1.0300. The pairing has stayed heavy through the session, following the greenback's overall softer tone, with the rebound in equities adding further weight. The 1.0250 region appears to be key, with a band of bids noted at the level, and decent stops just underneath.

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