GBP: Opened early Europe at $1.5695, stg0.7857, GBP closed in NY at $1.5697 after recovering from a session low of $1.5674, the rate having seen highs earlier in the day of $1.5728. Cable recovered in early Asian trade, the rate edging to a high of $1.5714 before turning lower with euro-dollar. Cable touched a low of $1.5678 before it settled between $1.5690/95 ahead of the European open. Asian holidays, Singapore the major centre closed, made for subdued trading conditions through the overnight session, with a light global data calendar expected to extend this quiet tone. However, with the approach of Jackson Hole Aug 31 and the Sep ECB meeting (Sep 6) market is open to headline reaction moves. Cable tracked euro-dollar’s early recovery extension into Europe, on the back of EMU peripheral bond spread tightening, the rate pushing up to $1.5717 before turning lower, again in line with euro-dollar. Cable met support ahead of $1.5700, touching a low of $1.5702 before edging back toward earlier highs ahead of the NY open.
EUR: Opened early Europe at $1.2332, Euro-dollar closed in NY $1.2334, after recovering off a session low of $1.2288 to $1.2347, the rate having seen highs earlier in the day at $1.2382. Rate squeezed down to $1.2327 in opening trade, bouncing to $1.2358 as early market reacted to a weekend press article in Der Spiegel suggesting that the ECB is considering setting limits on yields of euro area sovereign debt by pledging unlimited bond purchases. This early positive tone quickly lost momentum as analysts picked apart the article, the rate easing to $1.2321 before settling between $1.2328/38 ahead of the European open. The Der Spiegel article influenced opening trade into Europe, the tightening of EMU peripheral bond spreads providing the early demand that saw euro-dollar break above its overnight high and move on to $1.2369. Lack of momentum prompted spec longs to pare back early positioning, sales taking the rate to $1.2348 but underlying positive tone remained in place with rate able to reclaim $1.2360 ahead of the NY open. Markets generally subdued.
JPY: Opened in early Europe at Y79.50 and Y98.08, asian trade opened flat due to the national holiday in Singapore, before Gotobi demand from Japanese importers lifted dollar-yen to Y79.60 through the fix. Rate extended gains to Y79.66 where the pair stalled,
profit take supply and sharp cross supply eased to Y79.42, later bouncing to Y79.50. Euro-yen consolidated above Y98.00 and extended to Y98.22 in tandem with the dollar. Profit take sales eased off highs, exporter supply added weight to Y97.94, later nudging higher to Y98.05. A quiet European session for dollar-yen with trade stuck in a tight Y79.44-54 range, lacking direction. Offers reported at Y79.60, through here opens techs at Y79.63 (100 Day MA), ahead of more offers at Y79.65. Euro-yen opened on a bid tone and lifted to Y98.35 on reports in der Spiegel that suggested the ECB is considering setting limits on euro sovereign debt. Profit take sales eased off highs and the cross settled in a tight range ahead of NY. Strong offers reported at Y98.50, a break opens tech resistance at Y98.62 (Bollinger band).
EasyForexNews Research Team