GBP: Opened early Europe at $1.5786, stg0.7909, GBP closed in NY at $1.5788, after pulling back from an intraday high of $1.5829 (NY high $1.5817) in a quiet, London holiday session. Rate recovered into early Asia, posting highs at $1.5793 before turning lower as early risk appetite quickly evaporated, the lowering in Fonterra’s milk price forecast for 2012-13 weighed on the Kiwi and led to the paring back in risk positions. Cable pressed to lows of $1.5754, as stops ‘fired-off’ through $1.5785-60, before meeting demand ahead of $1.5750 (Asian sovereign bids noted $1.5750/40). Rate recovered in late Asian afternoon trade, retested the early highs at $1.5793 before momentum faltered again. Rate eased to $1.5770 in early Europe before French demand emerged to take it back up to $1.5789, the same buyer seen in euro-dollar. Euro-sterling break of stg0.7935 on general euro demand weighed on cable’s recovery, squeezing it to $1.5768 before stronger dollar sales allowed it to bounce back to $1.5795 late morning, while the cross was held by stg0.7955, closing the morning back at stg0.7945.
EUR: Opened early Europe at $1.2485, Euro-dollar closed in NY at $1.2499 after pulling back from a session high of $1.25358 to $1.2496 in a very quiet London holiday market. Rate recovered to $1.2506 into early Asian trade before risk appetite began to fade. Fonterra lowering the price forecast for 2012/13 (milk prices, a large component of NZ GDP) was cited for this change in outlook. Euro-yen sales into the Tokyo fix, along with reported black box sales from around $1.2495, were seen driving the rate lower, the break of $1.2490 added weight that took it to a low of $1.2466. Rate recovered through the balance of the session, meeting resistance at $1.2493 into early Europe. Fix demand into 0900 London time saw rate spike up to $1.2511, with reports of French name buys (for middle east?) extending the move to $1.2547, aided by stops. clear of $1.2550 offers as Fitch warned on US AAA status saw rate move on to $1.2562, the action taking out stops above $1.2560. Major stops now seen cleared with take profit offers now seen placed toward $1.2600; short term stops $1.2520.
JPY: Opened in early Europe at Y78.51 and Y98.09, Dollar-yen opened flat in Asia around Y78.75, before sharp cross supply from Japanese banks/corporates pressed to Y78.51 through the Tokyo fix, a turn in equities also added to the mix. Dollar traded sideways and later bounced to Y78.60 on importer demand ahead of Europe. Euro-yen opened at Y98.45 and slipped through strong support to Y97.87, later bouncing to consolidate above Y98.00. Early demand on the European open led dollar-yen to Y78.60, before paring gains. Support from model accounts re-tested the intraday high, later easing to Y78.55 and settle in a tight range. Strong offers reported at Y78.75/80, through here and expect resistance from exporters for month end flow. Euro-yen looked to hold above Y98.00 in early dealings and traded sideways before lifting in tandem with euro-dollar to Y98.30. Sentiment continued and the cross extended gains through strong resistance to print fresh highs of Y98.69. The underlying tone remains buoyant ahead of NY with strong offers reported at Y98.80, ahead of Y99.00.
GOLD: Spot gold prices remain in marginal negative territory Tuesday remaining within the same range that was observed from Asian traded hours. Prices have remained in moderate corrective mode after trading up to a 20-week high of $1676.45 a troy ounce during Monday’s session. Spot gold has drifted lower from opening highs of $1666.74 posted early on in Asia this morning to hold at an intra-day low of $1657.54. Gold prices remain fairly buoyant considering some of the negative news flow surrounding the much anticipated speech of US Federal Reserve Chairman Ben Bernanke at Jackson Hole this Friday. The Daily Telegraph cites many economists playing down the prospects for the Jackson Hole symposium, saying that it would not produce the “shock and awe” results that were seen back in August 2010. Some of the scaled back expectations have not had too adverse an effect on gold so far, with
prices continuing to hold above $1650 a troy ounce. Trading activity has been limited this morning, with just a few medium bids seen working around $1655 so far. Spot gold currently trades $1662.20, down $1.70.
EasyForexNews Research Team