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Daily FX View: EM Asia FX Weighed By Fed Taper

Represent six of eight worst performers among 24 major currencies, JPY higher as market unwinds carry trades, Bloomberg strategist TJ Marta writes.

• KRW, NZD, MYR, THB, PHP, SGD underperform

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• KRW underperforms 23 peers

- USD/KRW 1-mo. forward +0.6% at 1060.94, session range 1052.85/1064.3

- View: Bullish

-- Rebounding after consolidation above Dec. 11 low since 2011

-- Momentum: MACD differential rising from low since Sept., RSI higher from low since Nov., stochastics crossing higher from low since Oct.

-- Resistance 1068.42 Nov. 21 high; 1077.25 Nov. 12 high

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• JPY higher vs 21 major peers as market unwinds Asia carry trades after Fed taper

- All industry activity index for Oct. -0.2% m/m vs est. -0.3%, prior revised to 0.5% from 0.4%

- USD/JPY -0.24% at 104.03, session range 103.78/104.37

-- View: Downside bias negated by Fed taper

---New high since 2008; breaching May high, 38.2% rebound of 1998-2011 decline

---Momentum mixed

--- Resistance 110.66 Aug. 2008 high, higher end of Japan government's FX range

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• NZD among FX underperformers despite data beat

- GDP 3Q 1.4%q/q vs est. 1.1%, prior revised to 0.3% from 0.2%

- Trade balance 183m NZD, prior -173m NZD as China becomes largest trading partner in dairy

- NZD/USD -0.57% at 0.8191, session range 0.8178/0.8239

- View: Lower

-- Falling within downtrending channel from Oct. 22 high

-- Momentum falling: MACD differential, RSI, stochastics lower

-- Support 0.8085 Nov. low

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• BRL underperforming 22 FX peers, weighed by Fed QE taper, scaled-back BCB FX intervention program, unemployment rate beat

- Central bank extends FX intervention program at least through mid-year, scales back program to $1b/week vs current $3b/week

- Unemp. for Nov. 4.6% vs est. 4.9%, tied for record low in data to 2001

- USD/BRL +0.66% at 2.3498, session range 2.3370/2.3562

-- View: Higher

--- Rebounding from test of 61.8% retracement of Nov.-Dec. rally

--- Momentum turning higher

--- Breaching 2.3374 61.8% rebound of Aug.-Oct. decline

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NOTE: TJ Marta is an FX strategist who writes for First Word. The observations he makes are his own.