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By XE Market Analysis June 14, 2013 2:08 pm
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    XE Market Analysis: Asia - Jun 14, 2013

    FX trade was thin in N.Y. on Friday, as a very volatile week saw traders stepping back some from the market into the weekend. Firmer PPI supported the greenback early on, though as stocks turned decidedly negative at mid-morning, the USD lost its footing again. Industrial production data was softer than forecasts, which didn't help sentiment. EUR-USD traded briefly under 1.3300 following the PPI, though make its way back to 1.3350 in light dealings. USD-JPY fell under 95.00 toward 94.25 in concert with Wall Street weakness. Markets will look to the Fed next week, where the debate on tapering will spotlight.

    [EUR, USD]
    EUR-USD dipped briefly under 1.3300 after firmer U.S. PPI data, though found a host of buyers under the figure. The pairing received mild support related to option expiries at 1.3300 and 1.3320. European account demand was noted under 1.3300 layered into yesterday's N.Y. morning lows at 1.3280. The underlying tone on the daily chart is still positive, but failure to clear 1.3400 barriers, along with overbought levels negated upside momentum. Large 1.3400 barriers are rolling off today and there are more digital options maturing early next week, which points to limited upside ahead.

    [USD, JPY]
    USD-JPY drifted lower after offers capped from 90.35. A relatively narrow trading range has persisted since the European open. 95.00 expiries are exerted a bit of an influence into the N.Y. cut. After the volatility this week most short term accounts are unwilling to run positions and this is likely to persist into the weekend. Later, the abrupt turnaround on Wall Street saw USD-JPY tumble to lows under 94.25, after it had found a floor around 95.00 earlier.

    [GBP, USD]
    Cable firmed up into the U.S. data, trading out of 1.5620 to 1.5700. The U.S. data saw a brief dip into 1.5630, but overall Cable is supported since it corrected overbought levels during the European morning. Profit taking went through and there was an increase in corporate hedging, which drove Cable down from 1.5715 versus yesterday's highs around 1.5740. Cable expiries are due to run off at 1.5640 and 1.5700 in the next hour or so and sideways trading is anticipated until then.

    [USD, CHF]
    The CHF has settled at easier levels as risk appetite improved in N.Y. on Thursday and sentiment held up in Asia. The CHF reversed higher on Friday, as equities faded once again. Specs were tentative buyers of risky positions overnight, though that dissipated in N.Y. dealings. EUR-CHF eased to around 1.2280, as USD-CHF faded into the 0.9200 area from over 0.9250. Appetite to run aggressive positions remained low into the weekend after the volatility this week. The EUR-CHF upside should remain limited into 1.2350 and above, while USD-CHF is expected to meet supply ahead of 0.9280.

    [USD, CAD]
    USD-CAD ramped up to 1.0185 from 1.0160 after the warmer U.S. PPI, and soft Canadian manufacturing data results. The pairing later tumbled through sell stops at 1.0145, trading toward 1.0115 lows. The AUD move higher likely helped the CAD, though USD-CAD bids returned under 1.0120. Corporate buyers reportedly stepped in, taking the pairing back over 1.0180, as equity markets headed lower

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