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By XE Market Analysis November 26, 2014 2:14 pm
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    XE Market Analysis: Asia - Nov 26, 2014

    The dollar was broadly lower in N.Y. trade on Wednesday, as softer data, and ongoing pre-Thanksgiving position squaring kept the unit on the back foot. Firmer jobless claims, softer income and consumption data, and pullbacks in Chicago ISM, Michigan sentiment, and new home sales all contributed. Despite the data, Wall Street maintained its poise, trading mixed overall. Yields remained soft through the session. Activity largely screeched to a halt after the London close, as U.S. based traders closed their books for Thursday's holiday.

    [EUR, USD]
    EUR-USD topped out at 1.2532, after running through stops just over the figure after the last round of data. U.S. account short covering has been noted again this morning, as positions are cut into the Thanksgiving holiday. Big picture, given the growing calls for ECB QE, the euro's modest rally will likely just provide better levels to sell into, and we in no way see this morning's move higher as a shift in trend.

    [USD, JPY]
    USD-JPY opened near 117.75. peaking at 117.81 into the early U.S. data. The pairing slipped to 117.44 lows ahead of the London close, where support in the form of Japanese investor demand. From late morning until early afternoon, the pairing clawed its way back over 117.80.

    [GBP, USD]
    Sterling has rallied against both the dollar and euro. There doesn't appear to have been a specific catalyst, though a strong expectations component in the CBI distributive sales survey (released late AM in London) helped add fuel to the evolving bid. It could also be said that sterling has been due a short squeeze as the market built by a net short exposure in recent weeks. General USD weakness helped as well.

    [USD, CHF]
    EUR-CHF has continued to trade 1.2020. The cross had lifted from the 1.2010 area after SNB's Jordan repeated his opposition to gold initiative, arguing once again that it would impede the central bank's ability to defend the 1.2000 franc cap. There are also market rumours that the SNB has effectively set up a buffer zone by lining up bids from 1.2010 to 1.2000, and Reuters has reported last week that a sizable bid was conspicuously placed on EBS at 1.2006. SNB's Zurbruegg recently pledged that the 1.2000 franc cap will be defended "with utmost determination".

    [USD, CAD]
    USD-CAD peaked at 1.1297 into the North American open, where it was pushed back by standing offers into the 1.1300 level. The pairing later touched 1.1232 lows, matching Tuesday's base. WTI oil eased into trend low territory, under $74/bbl, which limited USD-CAD's downside. Support now comes in near 1.1225, while corporate bids are seen in place at 1.1200.

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