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By XE Market Analysis October 8, 2013 1:38 pm
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    XE Market Analysis: Asia - Oct 08, 2013

    FX trade was extremely lethargic in N.Y. on Tuesday, with major dollar pairings idling inside of less than 50 point ranges. The scheduled August trade report was postponed due to the government shutdown, though equities continued their losing ways on fears of an extended shutdown, and the looming debt ceiling. There was very little progress reported from D.C. on fixing things, with both sides entrenched. Obama doesn't want to negotiate, and Boehner doesn't want to vote on a "clean CR". The greenback eased lower early in the session, taking EUR-USD briefly over 1.3600, though the buck managed to recover some ground in thin afternoon dealings.

    [EUR, USD]
    EUR-USD gravitated to 1.3600 into the N.Y. options cut. EUR-USD hit intra-day highs at 1.3607 and drifted back to 1.3575 as offers held. Since late Asia sovereign accounts were tipped, though these offers are looking a bit vulnerable as the dollar trades at slightly softer levels against the European majors.

    [USD, JPY]
    USD-JPY is hovering just in front of 97.00 as offers from 97.25-30 capped after the N.Y. open. U.S. accounts have adopted a strategy of selling into upticks since the start of the week, with close-to-market stops layered between 97.60 and 97.80. Overnight, USD-JPY's downturn was thwarted by U.S. funds booking profit after 96.50 barriers held.

    [GBP, USD]
    GBP raced higher into the N.Y. open amid fund demand. Cable broke 1.6100 and EUR-GBP moved into the 0.8425 region. There was conjecture that GBP may also be benefiting from U.S. uncertainty as short term funds look for a safe bet as the U.S. debt ceiling impasse drags into its eighth session. Other potentially supportive news is the Royal Mail's IPO. According to Sky News, which cited city insiders, there has been total investors orders in excess of GBP 30 bln and it will be sold at the top-end of the indicative price range of 260-330p a share.

    [USD, CHF]
    The CHF is mixed in quiet U.S. trade. USD-CHF is trading relatively close to 0.9050, where it has moved either side since yesterday's N.Y. open. EUR-CHF saw most of the flows in the European morning amid macro fund demand from 1.2260 to 1.2295. There was positioning for the upside ahead of today's speech from SNB's Jordan, which is due after the London close and will cover the CHF cap and the current account surplus. Jordan is likely to talk up the benefits of the lower limit in EUR-CHF at 1.2000 and could guide the cross back through the 200-dma at 1.2310 today.

    [USD, CAD]
    Another slow day for USD-CAD, which managed a 1.0308 to 1.0334 range in North America. The wider Canadian trade defecit result earlier was enough to move the pairing to session highs, though offers at 1.0340 and again at 1.0360 kept things tamped down.

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