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By XE Market Analysis November 7, 2014 2:47 pm
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    XE Market Analysis: Asia - Nov 07, 2014

    The dollar chopped around lower, then higher then lower again after the October U.S. NFP print missed the mark, though when the dust settled, it appeared pre-weekend paring of long dollar positions took hold. The greenback drifted lower through the afternoon session, after the USD index posted four-year highs on Thursday. Equities and yields turned lower through the morning session, though Wall Street clawed most losses back, ending the day mixed over all. EUR-USD ultimately moved over 1.2440, after posting trend lows of 1.2359 immediately after the jobs data. USD-JPY gave up the 115 handle for good early in the session, eventually posting lows under 114.40. USD-CAD fell toward 1.1330 from near 1.1450 after a very strong Canadian employment report, while cable lifted itself from 1.5790, to over 1.5850.

    [EUR, USD]
    EUR-USD spiked up to 1.2442 from 1.2395, before dropping back under 1.2360 after the jobs report. The pairing later reclaimed the 1.24 handle, rallying to 1.2469 highs, after putting in a 1.2359 trend low in the choppy aftermath of the data. As Wall Street settled into negative territory, and as yields faded from highs, the dollar overall came under some pressure. This was not too surprising given the USD index touched four-year highs on Thursday, with pre-weekend profit taking underway into the London close.

    [USD, JPY]
    USD-JPY fell under 114.50 from 115.45, then pulled up to 115.00 after the jobs report. The pairing remained lower however, though was off its worst levels after finding Japanese bidding support under 114.50 by mid-morning. The dollar subsequently moved back over 114.90, though fresh offers were said to be building into 115.00, which turned things lower once again. The softer risk backdrop kept pressure on the pairing into the close, where a 114.26 low was printed.

    [GBP, USD]
    Cable saw only a moderate bounce after setting a new 13-moth low at 1.5790, which was seen in the wake of disappointing trade deficit data out of the U.K., and the U.S. jobs report. As the dollar moved broadly lower howver, sterling managed to rebound over 1.5850 in afternoon dealings.

    [USD, CHF]
    EUR-CHF logged a fresh major-trend low at 1.2030 during N.Y. trade on Friday, though speculative and interbank participants are in high alert to the risk of SNB intervention at these levels given the close proximity of the 1.2000 limit peg. There has been talk of SNB bids, though no confirmation. The SNB hasn't officially intervened since 2012. Euro weakness and bouts of risk aversion in global markets have been weighing on the cross. Defending the cap will be a tougher proposition in the context of broad, fundamentally-driven euro weakness than it would be in the case of specific franc outperformance. The central bank can be expected to remain resolute, however, having hinted at the option of negative interest rates if need be. Swiss policymakers' principle concern is the persisting threat of deflation, which runaway franc strength would contribute to.

    [USD, CAD]
    USD-CAD fell sharply following the much better than expected Canadian employment report, dropping 100 points under 1.1330. The pairing subsequently bounced toward 113.90, though reports of fresh offers moving into the 1.1400 level stopped the rebound in its tracks. It appeared quite a few longs were caught on the wrong foot after the data, and as a result, we suspect there will be good selling interest on minor rallies toward 1.1400 going forward.

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