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By XE Market Analysis October 9, 2018 3:13 pm
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    XE Market Analysis: Asia - Oct 09, 2018

    The Dollar index fell from opening highs of 96.15 to a low of 95.68 in N.Y. trade on Tuesday. Profit taking from 6-week highs was in the mix, while the Greenback was sold as risk taking levels again soured. EUR-USD bounced from 1.1432 to 1.1494, while USD-JPY dipped briefly under 113.00. USD-CAD flirted with the 1.3000 level before falling under 1.2940 on firmer oil prices. Cable rebounded to near 1.3150 as reports of Brexit progress were heard.

    [EUR, USD]
    EUR-USD was lifted from the six-week lows of 1.1432 seen at the N.Y. open, topping at 1.1490 on reported London short covering. We look for further Euro downside in the coming weeks, as the political situation in Italy remains fluid and uncertain. August lows of 1.1299 remain the next major downside target.

    [USD, JPY]
    USD-JPY has been range bound through the N.Y. session, finding support under the 113.00 mark after dipping to eight session lows of 112.82 on Monday. The pairing topped at 113.33 at mid-morning. The improved risk backdrop provided some support early, though as Wall Street faded, so too did USD-JPY. Bigger picture, the U.S./China trade war and reported Japan repatriation flows should limit upside for now.

    [GBP, USD]
    Cable traded near 1.3050 through the N.Y. morning session, before rallying to nine-session highs of 1.3148 into the London close. The move higher came as reports that the U.K. and EU were close to a Brexit deal.

    [USD, CHF]
    EUR-CHF retreated toward the 1.1400 level after posting a six-week high at 1.1450 on Friday. The gain the cross saw last week reflected a pricing-out of safe haven positioning after the Italy's coalition government produced a EU-appeasing budget, although concerns remain.

    [USD, CAD]
    USD-CAD flirted with the 1.3000 mark in early dealings, topping at 1.3004 after printing a seven-session high of 1.3013 on Monday. Relatively firm oil prices should limit USD-CAD gains going forward. Indeed, the pairing fell to 1.2940 later in the session as WTI crude again topped the $75 mark.

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