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By XE Market Analysis March 21, 2014 1:34 pm
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    XE Market Analysis: Asia - Mar 21, 2014

    After a busy week, FX trade was light and relatively quiet in N.Y. on Friday. Following the sharp gains posted this week, the dollar came under s bit of position squaring pressure versus the European majors and the commodity bloc. There was no U.S. data releases, though equities managed to rally, taking the S&P 500 to its best levels ever. The improved risk appetite, along with still firm Treasury yields allowed yen to ease modestly. EUR-USD moved between 1.3795 and 1.3810, as USD-JPY found support into 102.00 and managed highs of 102.40.

    [EUR, USD]
    EUR-USD gained some traction, reclaiming the 1.38 handle after slipping to 1.3775 lows. Firmer equities, and better risk levels prompted some pre-weekend paring of long dollar positions, though with Treasury yields holding near their highs, and U.S./EU fundamentals favoring the dollar, EUR-USD's upside could be limited for the time being.

    [USD, JPY]
    USD-JPY made something near to a horizontal line around 102.40 during Asian trade, though was sold off to 102.02 in London, where buyers emerged. N.Y. desks bid up the pairing in early trade, taking it to 102.40 highs on the back of improved risk taking levels, and still high U.S. Treasury yields.

    [GBP, USD]
    Cable breached Thursday's low and logged a fresh five-week low of 1.6475 ahead of the N.Y. open. Pressure came via GBP-JPY which dove sharply, around 100 pips to a 168.10 low. M/Y/ dealings were fairly quiet, though weekend short covering allowed cable to briefly reclaim the 1.65 handle. Sterling sellers reemerged over the figure from there.

    [USD, CHF]
    EUR-CHF failed to hold gains back above 1.2200 and has settled back to familiar levels in the mid-to-upper 1.21s. The SNB's decision to leave monetary policy unchanged and the Swiss franc limit peg against the euro in place had no market impact. The CHF has unwound a portion of its safe-haven premium following the placating tone of Russia's Putin earlier in the week, which saw geopolitical tensions over Crimea recede.

    [USD, CAD]
    USD-CAD was range bound inside of 1.1220-60 overnight, and sat near 1.1250 into the North American open. The pairing slid to session lows of 1.1175 after hotter than expected Canadian CPI, and stronger retail sales data. Stops were triggered under 1.1200, though noted buyers at 1.1180-70 put a floor under it. USD-CAD quickly recovered, and spent the remainder of the session on either side of 1.1200.

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