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By XE Market Analysis January 30, 2014 3:10 pm
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    XE Market Analysis: Europe - Jan 30, 2014

    The Fed did not surprise, as it tapered another $10 bln from its asset purchase program. The dollar had been on the rise early in N.Y. trade on Wednesday, though as equities melted down, along with Treasury yields, the greenback moved mostly lower. The Fed made no mention of emerging markets in its statement, though with some linking current EM woes to the Fed's slow retreat, emerging currencies will be watched closely.

    [EUR, USD]
    More consolidation may be in store for EUR-USD, as the 1.3600-1.3700 band continued to hold up. Positions will likely be pared back until the current emerging market picture plays itself out some, though stops are being noted over 1.3720 and 1.3580 now.

    [USD, JPY]
    USD-JPY scraped along the bottom of its recent range, though did find good support into the 102.00 region through the day on Wednesday. This said, as long as the risk backdrop remains murky, upward pressure on the yen will continue. Emerging market developments will be key in the near term.

    [GBP, USD]
    Cable slipped toward 1.6525 in Morning N.Y. dealings, though as the dollar came under some pressure ahead of the FOMC, it reclaimed the 1.6590 mark. Morning safe haven Gilt buying saw U.K. rates ease back, and likely weighed some on sterling.

    [USD, CHF]
    EUR-CHF slid lower through the session, as safe-haven CHF buying was steady. The cross fell to lows of the year near 1.2213. Traders will be hesitant to push too far under 1.2200, as the SNB will be paying close attention.

    [USD, CAD]
    USD-CAD has maintained its recent altitude, though the pair came up just shy of the previous 1.1187 high seen in London on Wednesday. Post-FOMC, there was little CAD reaction, with 1.1140-70 covering the market into the close. The dovish BoC may keep USD-CAD's bigger picture trend upward sloping however, and a break of 1.1200 can be expected in the not too distant future.

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