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By XE Market Analysis June 14, 2018 3:13 pm
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    XE Market Analysis: Asia - Jun 14, 2018

    The DXY shot up to a near three-week high of 94.77 from 93.21 lows after the ECB announcement, which while naming an end-date for QE, said rates would not be raised until at least the summer of 2019. This saw EUR-USD drop better than 200 points to 1.1591. Strong U.S. retail sales lifted the dollar elswhere, taking USD-JPY to 110.69 highs. USD-CAD rallied to 1.3110 highs on the back of trade concerns, while calbe was draged lower by EUR-USD.

    [EUR, USD]
    EUR-USD slid on the ECB news, which finally saw the Bank put an end-date on QE, though at the same time, said interest rates won't rise until late 2019 at the earliest. The pairing initially slid to lows of 1.1719 from near 1.1820. EUR-USD continued to move lower, weighed down by a dovish Draghi press conference. The euro eventually based at 1.1601 into the N.Y. close, marking a better than 200 point drop from pre-Draghi highs near 1.1830. Buyers stepped in ahead of the June 1 low of 1.1617, resulting in a bounce to 1.1652, though later moved to lows. The May 10-month low at 1.1591 may now be an achievable target.

    [USD, JPY]
    USD-JPY topped at 110.69, coming from pre-U.S. data lows of 109.93 lows ahead of the open. The pairing was unable to top Wednesday's three-week high of 110.84, though pullback was limited to 110.25, which was seen into the London close. Yesterday's Fed rate hike should keep USD-JPY supported going forward, as the BoJ remains about the only major central bank in full-bore easing mode.

    [GBP, USD]
    Cable was pulled lower by EUR-USD, posting a two-week low at 1.3270 even while the pound prints an eight-session high against the euro, which has been a consequence of the common currency's ECB-inspired underperformance. Cable had seen a peak at 1.3447 following an above-forecast retail sales report out of the UK, and the subsequent decline has made this the biggest daily decline since May 1. We are looking for Cable to revisit the late May seven-month low at 1.3204. Resistance is at 1.3397-98.

    [USD, CHF]
    EUR-CHF slipped to a one-week low of 1.1558, as the euro in generally plunged after the ECB said no rate hike until summer 2019 at earliest.The recent phase of euro weakness saw the cross lose over 4% from the 41-month high that was printed a month ago at 1.2005, which was the summit of an 11-month rally phase, and which in turn was a reflection of what had been -- before recently -- a sense of abating existential risks that the Eurozone was facing. The jury will remain out about how market friendly Italy's new government turns out to be.

    [USD, CAD]
    USD-CAD was on the rise on Thursday, benefiting from the greenback's broad rally, which came on the back of solid U.S. retail sales data, and despite WTI crude's ramp up to 2-week highs over $67.00/bbl. The pairing topped at 1.3110, coming from overnight lows of 1.2950. NAFTA uncertainty will continue to put a floor under the pairing. Canada announced it would impose retaliatory tariffs on U.S. goods beginning July 1.

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