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Despite firmer US Tsy yields, the dollar......>

FOREX
FOREX: Despite firmer US Tsy yields, the dollar continued to weaken modestly
overnight in quiet Asia markets. The dollar selling theme continued into Europe
linked to hedging requirements for month, quarter and year-end. Eur/Usd touched
4-week highs of $1.1947 before easing to the $1.1930-35 area. Cable tracked the
move to $1.3457 and holds near the peak of its daily range. $1.3500 holds
optional expiry interest to the value of Gbp825mn for today's NY cut. Having
moved through Y113.00, Usd/Jpy continued defensive and slipped to Y112.67 with
added weight from Japanese exporters. Commodity currencies outperformed, Aud/Usd
took out reported macro supply through $0.7800, extended to $0.7810 before
fading. Usd/Cad slipped to Cad1.2605, kiwi lifted to Nz$0.7099. Focus turns to
US data at 1330GMT from Advance Trade, Wholesale Inventories and Weekly Jobless
Claims. The MNI Chicago Report follows at 1445GMT.

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