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By XE Market Analysis September 13, 2013 1:28 pm
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    XE Market Analysis: Asia - Sep 13, 2013

    The dollar dipped early in the session as the White House said U.S. President Obama has not made a decision on the Fed Chairman, according to Dow Jones. USD-JPY fell from 99.75 to just under 99.60 and EUR-USD edged back into 1.3300. The Nikkei report that Summers could be named as the next Fed Chairman boosted the dollar in late Asia. However, there were doubts over the details in Europe as it surfaced from the Japanese press and had no named sources. Later, despite the softer U.S. retail sales, cooler core PPI, and weaker Michigan sentiment index, the greenback posted modest gains versus the euro into the London close, though the activity was seen as option and position squaring driven.

    [EUR, USD]
    EUR-USD reversed course lower after reclaiming the 1.33 handle after the U.S. data. It topped out ahead of 1.3330 for the third consecutive session. It initially it drifted to 1.3300 and then accelerated as stop losses went through via EUR-GBP under 0.8380 to eight month lows at 0.8366. The interbank market will be nursing losses after getting caught long as it appeared that the dollar was going sustain softer levels in light of today's U.S. data. Market participants appear more comfortable in playing the range though ahead of the FOMC and buyers are coming back in now ahead of 1.3250-60.

    [USD, JPY]
    USD-JPY started the session around 99.50 after it found good support into 99.00 on Thursday. USD-JPY slipped lower after yesterday's N.Y. options cut, but got a fillip on a Nikkei report that rehashed talk of corporate tax cut in Japan. Dollar buying interest was steady out of Tokyo with corporate names and general short covering in the mix. The pairing didn't fare so well in N.Y. as it struggled to 99.75 before sliding under 99.40 post-U.S. data. It managed lows of 99.24, before settling at 99.30 into the close.

    [GBP, USD]
    Option exposure absorbed EUR-GBP losses, which extended through 0.8360 as support at 0.8380 and 0.8365 gave way. The downturn was pinned on corporate flows, though the underlying tone has been heavy for some days due to offers related to EU farming subsidies ahead of the end of September. EUR-GBP may begin to find better support towards 0.8350 and below. Long-term barriers are live at 0.8350 and this level has been intact since January-18 and should be sizeable. Under 0.8350 decent corporate demand is tipped towards 0.8330-35 and is a key hedging level as it represents 1.2000 on the GBP-EUR reciprocal.

    [USD, CHF]
    The CHF is mixed in quiet trade. EUR-CHF is marking time close to 1.2375, which is the middle of the range from the last 24 hours or so. A USD-CHF rebound out of 0.9270 to 0.9340 ran out of steam as offers from model funds put a top in place

    [USD, CAD]
    USD-CAD was dead in the water again on Friday, moving between 1.0328 and 1.4345. There was talk of option expiries at 1.0335 (about mid-range) holding the pairing still on Friday, though post-expiry there was only marginal price action. USD-CAD intra day bounces have been more and more shallow this week, leading some to favor a downside break next week into, or as a result of the FOMC.

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