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By XE Market Analysis March 28, 2014 5:11 pm
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    XE Market Analysis: Asia - Mar 28, 2014

    The dollar reversed some of the moves it had seen the prior 24-hours in N.Y. trade on Friday, taking EUR-USD from 1.3705 lows to a high of 1.3773, and USD-JPY up to 102.97, from Asian lows under 102.10. The dollar bloc, which had ramped higher on Wednesday and Thursday on the back of hopes for China stimulus, appeared to have overshot to the upside, and profit taking reversed a good bit of the CAD and AUD's gains on Friday. On the data front, U.S. personal income and PCE data was better than expected, and While Wall Street rallied, it it pulled back from session highs into the close. Treasury yields were modestly firmer.

    [EUR, USD]
    EUR-USD popped to intra day highs of 1.3770, with buying picking up on the move over the 1.3750 London peak. Offers were seen coming in again from 1.3780 to 1.3800, which scapped upside into the London close. Given the negative Spain CPI print, and more recently, the softer German price data, the euro should remain in sell-the-rally mode, as the market prices in further ECB easing steps.

    [USD, JPY]
    USD-JPY rallied to near the top of its 12-day range ahead of the U.S. sentiment data, touching 102.74. Initial resistance was under the March 13 peak of 102.86, though the pairing later managed 102.97 highs. Japanese exporter offers were reportedly parked into the 103.00 level, and USD-JPY eased back to 102.75 into the close.

    [GBP, USD]
    Cable made its way to 1.6649 highs in N.Y., though overall was held to a 50 point trading range through the session. There was little reaction to the as-expected U.K. GDP data in London, though the U.K. economy continues to show resilience. Cable will likely find support into 1.6600 near term.

    [USD, CHF]
    EUR-CHF has steadied back toward the 1.2200 level after making a one-month peak of 1.2234 on Wednesday. The up move reflected further unwinding of the Swiss franc's safe-haven premium. The cycle low of 1.2104 was left unchallenged during the recent risk-off phase. We see potential for a recovery to the 1.2300-1.2400 area, but this assumes there are no renewed flare-ups in geopolitical tensions.

    [USD, CAD]
    A bounce for USD-CAD, after it held support into 1.1000 in London trade. The pairing made its way back to 1.1041 highs early in the session, as pre-weekend short covering stepped in. AUD-USD was an influence as well, with that pairing settling into 0.9240, after nearly printing 0.9300 in Australia. The dollar bloc has reversed some of its recent losses, as sentiment for global growth improves, though today's CAD pull back appeared to be more profit taking than anything. USD-CAD later made it to 1.1077 highs.

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