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By XE Market Analysis March 14, 2014 2:26 pm
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    XE Market Analysis: Asia - Mar 14, 2014

    Dollar/Europe took a hit in early in the N.Y. Friday session, with EUR-USD up at session highs over 1.3935, USD-CHF approaching fresh 2.5 year lows near 0.8700, and cable ramping up to 1.6645. Thursday's meme of reserve related dollar selling remained, though the Ukraine crisis likely played a role as well, as U.S. Secretary of State Kerry, and his Russian counterpart met in London, with apparently little in the way of progress to report into this weekend's Crimea referendum. It appeared, that through this U.S./Russia faceoff, the dollar and rouble were both losers versus the major European currencies. EUR/RUB traded at 51.07, an all-time high. Elsewhere, USD-JPT was steady between 10120-60, while the CAD and AUD were mostly sideways through the session. U.S. data disappointed, with cooler PPI and softer Michigan sentiment prints.

    [EUR, USD]
    EUR-USD rallied slightly after the cooler PPI outcome, though focus remained on the Ukraine, where talk was that a Russian invasion may be imminent. U.S. equity futures turned solidly red, while yields remain under pressure, presumably on safe haven Treasury buying, and weighing on the dollar at the same time. EUR-USD later rallied from 1.3880 to highs over 1.3935, as talk of reserve related and Russian backed buying continued.

    [USD, JPY]
    The yen remained bid through the N.Y. session, as stock markets in Asia came under pressure. Concerns about China slowdown, alongside the risk of ratcheting geopolitical tensions, which could come to a head following the controversial referendum in Crimea this weekend, have been fuelling a risk-off theme. USD-JPY found sellers over 101.50 through the session, though did manage to maintain the 101.20 level.

    [GBP, USD]
    Sterling made fresh lows versus the euro and dollar in early trade, with EUR-GBP making a fresh three-month high of 0.8379 and Cable having run to a low of 1.6587, extending the sharp about-turn seen after making a high of 1.6718 yesterday. A sharp bout of dollar selling versus the European majors however, took cable back to 1.6645, and it managed to hold the 1.66 handle through the session.

    [USD, CHF]
    USD-CHF dipped to near 2.5 year lows, touching 0.8704, before pulling slightly higher. Safe-haven flows into the CHF were the main driver, as the Ukraine situation remained fluid, with no apparent progress make on the diplomatic front. EUR-CHF remained above 1.2100, though was sold quickly on rebounds over 1.2130.

    [USD, CAD]
    USD-CAD settled in around the 1.1075 level early in the session, coming from 1.1110 highs in London. The CAD inched higher on the back of a modest recovery in risk appetite, though with equities and risk taking again faltering on Ukraine issues, the market appeared to rethink a long CAD view. The pairing settled in a 1.1090-1.1105 band through the remainder of the session, managing to avoid stops seen at 1.1125.

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