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By XE Market Analysis October 23, 2018 3:03 pm
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    XE Market Analysis: Asia - Oct 23, 2018

    The Dollar came under some pressure in N.Y. on Tuesday, weighed down by a sharp sell-off in global equity markets. The DXY fell to 95.82 from overnight highs of 96.15. EUR-USD topped at 1.1493 after touching 1.1450 lows, while USD-JPY dipped briefly under 112.00 before bouncing to near 112.30. USD-CAD was heavy despite the sharp oil market sell-off, bottoming at 1.3085 ahead of Wednesday's expected BoC rate hike. Cable fell from 1.3045 highs, to a low of 1.2970.

    [EUR, USD]
    EUR-USD ranged between 1.1450 and 1.1493 through the N.Y. session, since settling near the top of its intra day trading band. The dollar has been under broad pressure today, as risk appetite vaporized, which has kept a floor under the Euro, despite the European Commission confirming it rejected Italy's fiscal plan and is now calling for re-submission and revisions.

    [USD, JPY]
    USD-JPY dipped briefly under the 112.00 mark, and its 50-day moving average, currently at 112.03, before finding buyers. The pairing bottomed at 111.95, a six-session low, as global risk aversion took hold, though has since recovered over 112.24. The interest rate differential and central bank policy outlook remains Dollar-positive, though extended bouts of risk-off conditions will keep the Yen supported.

    [GBP, USD]
    Cable jumped over 70 pips to an intraday high of 1.3045 on Brexit-related news, though quickly settled back under 1.3000. According to reports, the EU may offer a Britain a UK-wide customs union as a means to solve the problem of maintaining a free border between Ireland and Northern Ireland. Such an idea would still meet resistance from the Eurosceptic MPs, while Buzzfeed reports at least four Tory Party MPs have written to the backbench Tory Party 1922 Committee since Friday, two of which are Remainers, suggesting that a no confidence vote on the PM is almost inevitable.

    [USD, CHF]
    EUR-CHF dropped back toward 1.1400 from levels above 1.1500 over the last day, tracking EUR-USD lower and with the jury still out on the Eurosceptic government in Italy. EUR-CHF has support at 1.1400.

    [USD, CAD]
    USD-CAD fell to 1.3085 lows from earlier highs of 1.3122, despite the sharp sell-off in crude oil prices. WTI crude is down over 4%, trading to $65.75 lows. USD-CAD positions squaring ahead of what is expected to be a 25 basis point rate hike by the BoC on Wednesday has been the likely driver behind the modest CAD strength seen this morning.

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