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By XE Market Analysis June 21, 2013 3:06 pm
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    XE Market Analysis: Asia - Jun 21, 2013

    The dollar firmed in N.Y. trade on Friday, though volatility was substantially lower than the previous two sessions. The same applied to equity markets, where prices stabilized after two days of heavy selling. There was no U.S. data to speak of, and focus was largely on follow through dollar buying. Some position paring was seen in afternoon trade into the weekend, which took the greenback off its best levels. EUR-USD based just under 1.3100 before recovering to 1.3160, while USD-JPY moved up toward 98.00 after putting in a floor near 97.30.

    [EUR, USD]
    EUR-USD started at 1.3210, and was sold right from the open by U.S. names. The pairing found initial support around 1.3150, though eventually pushed briefly under 1.3100. After the London close, a patch of EUR-USD short covering stepped in at 1.3100, as the pairing ran into a layer of bids under the figure. Rather thin conditions saw the euro ramp up over 1.3160, with intra day names seen on the bid.

    [USD, JPY]
    USD-JPY opened the session near 97.70, heading under 97.35 by mid morning. Position squaring into the weekend was the driver, following sharp gains seen the prior session. Dip buyers returned in thin trade in afternoon dealings, as Treasury yields moved higher. The pairing stopped just shy of 98.00, where it reportedly ran into Japanese backed offers.

    [GBP, USD]
    Cable was vulnerable into the weekend. Failure to sustain levels over 1.5500 and the pick up in dollar demand after the N.Y. open eventually fill bids between yesterday's low at 1.5415 and 1.5400, on its way to 1.5370 lows. Light orders we seen towards June-3 high around 1.5370 and dampened any stop run lower. EUR-GBP weakened after the N.Y. open and traded into 0.8510. However, the cross should remain a range trade as M&A support into 0.8500 and 0.8480 is offset by long term hedging from 0.8580 to 0.8600.

    [USD, CHF]
    EUR-CHF is steady just ahead of 1.2250. It was supported in early N.Y. by dollar demand, which lifted USD-CHF toward 0.9370 versus overnight lows close to 0.9240. EUR-CHF traded as high as 1.2283 in early Europe, though unwinding of safety plays was very limited in Europe as stocks remained fragile. EUR-CHF is still meet buyers on dips that are looking to add positions ahead of the 1.2220-25 region, which held in recent weeks.

    [USD, CAD]
    USD-CAD spiked up to 2013 highs toward 1.0490 after the softer Canadian CPI and retail sales data. The last time the pairing was up there was in November of 2011. Buy-stops at 1.0420 and again at 1.0450 were major drivers, with the former level representing previous 2013 highs, and the latter, the June 2012 peak. The November 1.0523 high will be the next upside target, though option backed offers were noted into 1.0500. Still softer oil prices, and dodgy equities supported the pairing as well.

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