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By XE Market Analysis October 25, 2013 1:45 pm
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    XE Market Analysis: Asia - Oct 25, 2013

    The dollar picked up modest ground in morning trade on Friday, largely on the back of end-of-week positions squaring. The greenback took a fair beating through the week, following the softer U.S. employment report, and the subsequent pricing out of Fed tapering anytime soon. EUR-USD was supported on dips under 1.3800, as USD-JPY managed to hold over its 200-day moving average. On the economic calendar, durable orders were strong, though when Boeing was stripped out, the number was considerably less impressive. The final Michigan sentiment print was below expectations, and did not help USD sentiment.

    [EUR, USD]
    EUR-USD had come off its best levels of 1.3832 in London morning trade. The euro made several attempts on the 1.3830 area, but an unexpected drop in the German Ifo and option price congestion triggered a move back below 1.3800. Early N.Y. players carried on, taking the pairing to lows of 1.3775. Softer U.S. data though, limited the greenback's gains, and the EUR returned over 1.3600 into the London close.

    [USD, JPY]
    USD-JPY losses under 97.00 were limited in London due to Japanese order book flow. However, the close below the 200-dma on Thursday fueled U.S. fund selling overnight and a further reduction of short-yen positions by Japanese retail accounts. Some profit taking was in the cards in N.Y., as the pairing held over 97.25, and moved over 97.40 briefly.

    [GBP, USD]
    Cable is traded close to 1.6175 ahead of the London close, little changed from late on in the European morning. For the third session this week, offers at 1.6250-60 held the topside, which was also the case late September. The lack of upside progress has fuelled speculation of option barriers at 1.6275, as well as the already confirmed 1.6300 structures. There is conjecture that these may be one-month barriers that are due to run until late next week. EUR-GBP is also ending the week close to its best levels since early September, though consolidation set in just ahead of yesterday's 0.8551 peak and there was no impetus to force new highs as EUR-USD was unable to break 1.3850 barriers.

    [USD, CHF]
    The USD-CHF recovery stalled at 0.8965. The bulk of the heavy lifting in USD-CHF came in the European morning after a Swiss name was a good buyer out of 0.8900 to 0.8940. Thereafter, a variety of European interbank types covered dollar shorts and this theme continued until right after the N.Y. open. There was no further upside even after the U.S. data and sideways action was noted in listless N.Y. trade.

    [USD, CAD]
    USD-CAD powered higher in London trade, rallying from 1.0410 to 1.0455 highs. The move extinguished option barriers noted at 1.0450, though profit taking quickly ensued over the level. Canadian names were reportedly sellers at the North American open, resulting in a pullback to 1.0430, though Thursday's 1.0430 resistance level appeared to have tilted to support. Afternoon dealings saw USD-CAD again touch 1.0455.

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