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Asia Recap: Pound, Kiwi erase early losses

FXStreet (Bali) - A quiet session in Asia, with some early pressure in the Sterling and Kiwi being neutralized later during Tokyo hours, with the overall theme still being broad-based US Dollar strength after an upbeat US Non-Farm Payrolls last Friday.

The Pound was pressured in the early going, after UK Business Secretary Vince Cable said that UK's economic growth is being hampered by stalled exports, partly as a result of the high value of sterling. Despite the lower gap, GBP managed to pare the losses ahead of Europe. GBP/USD was supported by bids ahead of 1.5950, with the upside limited by 1.5980.

The New Zealand Dollar was also taken initially lower, after Reuters reported that Sri Lanka had temporarily halted some Fonterra product sales after some consumers came down sick. NZD/USD saw its lowest at 0.7714 before bouncing towards 0.7765 intraday high.

The Yen, after being sold last Friday in response to the NFP outcome, saw some modest buying, taking the USD/JPY rate towards 109.60, with buyers still fully in control. Jiji news website reported that GPIF may delay portfolio reform release to November or later.

The Aussie corrected higher to test offers at 0.87 after touching a fresh 4-yr low last Friday. Little order flow was seen ahead of Tuesday's RBA interest rate decision, with the language towards the AUD the key market interest after the sharp depreciation from recent weeks.

Gold was, and is likely to be, one of the focal attentions, with the price flirting with key 1,180 support area. A break lower would mark a fresh 4-year low for the precious metal, and may set the stage for a new bearish cycle as the Fed heads towards policy normalization.

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