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By XE Market Analysis March 5, 2014 2:47 pm
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    XE Market Analysis: Asia - Mar 05, 2014

    The dollar was mixed in N.Y. trade on Wednesday, easing early on the back of a softer ADP employment print, and softer non-manufacturing ISM. Slightly easier Treasury yields weighed as well, particularly on USD-JPY. EUR-USD found support a couple of times, and eventually made its way to 1.3745 in relatively light dealings. USD-JPY edged over 102.50, where fund offers were noted, resulting in a modest pullback. Wall Street eased modestly following Tuesday's spike higher, though profit taking was to be expected from record S&P 500 levels.

    [EUR, USD]
    EUR-USD matched the London low of 1.3707 after easing back from 1.3740 in early trade. The softer ADP data had little lasting impact on the dollar, which perked up broadly following the post-data dip. From there however, the euro regained a toe-hold, moving back over 1.3740 as Wall Street stumbled some. Euro trade will be quiet into Thursday's ECB meeting, where recall, there had been some talk of a rate cut on Tuesday.

    [USD, JPY]
    The dollar dipped after the softer non-manufacturing ISM outcome, taking USD-JPY under 102.40 from 102.50. The pairing later eased to near 102.25 responding to slightly lower Treasury yields, and some noted fund selling over the 102.50 mark. Support remains in place at 102.10-00, with talk of Japanese backed bids at the figure now heard.

    [GBP, USD]
    Cable flipped back above 1.6700 on the coattails of a rebound in EUR-USD. EUR-GBP also made several attempts lower before finding a footing after leaving a low of 0.8208. A key support zone is in EUR-GBP given by 0.8157-0.8200, a region that has marked a series of daily lows since mid-January. There seems to be a bullish view on sterling in market commentaries, and in particular a bearish one for EUR-GBP given the risk of further ECB easing measures. Today's release of the U.K. February services PMI, meanwhile, moderated less than expected, to 58.2, while the employment sub-index of the composite PMI was notable as it showed the fastest rate of jobs growth since the PMI data series started in January 1998.

    [USD, CHF]
    EUR-CHF nudged out a new rebound high of 1.2199 in N.Y., but the market lacked the muster for a test of 1.2200 and the cross ebbed back slightly. The new high reflected a continued unwind of risk-off positioning as markets adjust to the abatement in geo-political tensions over the Ukraine crisis. There is now some distance from the fresh cycle low of 1.2104 that was seen on Monday, which is the lowest level seen since June last year. The CHF will remain at the mercy of the risk backdrop.

    [USD, CAD]
    USD-CAD was steady near the bottom of its range overnight, as traders girded for this morning's BoC policy announcement. The pairing managed lows of near 1.1070, where a layer of bids has been reported. USD-CAD initially rallied following the BoC announcement and statement, where rates were left unchanged, as expected. USD-CAD rallied to 1.1099 from 1.1075, before falling back to intra day lows of 1.1035. The Bank did not mention the CAD in its statement, and overall, the lack of any additional dovishness was likely enough to support the CAD modestly.

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