GBP: Opened early Europe at $1.5935, stg0.7929, GBP closed in NY at $1.5935 after correcting back from NY session highs of $1.5943. Rate continued to pare Thursday’s gains into early Asia, the rate touching a session low at $1.5923 before edging back to
$1.5938 ahead of the European open. Risk appetite remained in play, supported by Thursday’s ADP data which has supported a positive forecast outcome to today’s US NFP (supported also by overnight release of an upbeat Monster Index), as well as China NDRC announcing infrastructure building plans. Strong demand for euro-Swiss into Europe led the risk-on rally, cable tracking euro-dollar’s rise to $1.5977 after taking out barrier interest at $1.5950. Pre release talk of a strong UK data release saw cable edge to $1.5983, jumping to $1.5986 on confirmed strong data release (from $1.5980) but met stronger take profit supply into the react that knocked it to $1.5963. Buyers quickly emerged to take rate back to $1.5980 but late morning demand for euro-sterling, taking it to stg0.7946, eased cable back to $1.5960 ahead of New York.
EUR: Opened early Europe at $1.2635, Euro-dollar closed in NY at $1.2632 after rate had seen highs Thursday of $1.2652, following an unchanged rate decision by the ECB, sinking to $1.2561 as Draghi outlined (an already leaked) bond buying plan. However, release of upbeat ADP data boosted risk, allowing euro-dollar to recover, tracking a solid performance in equity markets, touching a recovery high of $1.2647 ahead of the close. A fairly quiet start into Asia was relieved when rate popped up to $1.2643, but momentum quickly faded before it settled around $1.2630 through Asian afternoon trade, picking up a weak bid tone into Europe. Risk on tone gained pace in Europe, strong macro buys of euro-Swiss prompting euro-dollar to take out barrier interest at $1.2660. Momentum took rate to highs of $1.2686 before fading. Market aware of recent purchases of 1-mth $1.2675 calls (last week), as well as a large $1.2670 strike expiry for today’s cut and saw area around as ‘sticky’. Pullbacks remained shallow, with risk remaining favoured ahead of key US jobs report.
JPY: Opened in early Europe around Y78.92 and Y99.72, USD/JPY consolidated Thursday’s gains through Asia within a tight Y78.86/96 range. The rate was able to make a brief show above Y79.00 (Y79.04) in NY as it was driven higher on the back of US yields, which in turn were boosted by release of an upbeat ADP, which has edged forecasts for today’s US NFP to 130k from pre 115k calls (US Monster Index released overnight also supports a stronger forecast). Technicals suggest that outlook has turned to positive for this rate, though upside progress still has some work to do. Traders noted heavy Japanese exporter sell interest in Asia, but this supply was soaked up, holding the base at Y78.86, with demand for Aussie-yen a major component of the support. Risk on tone evident through late NY and Asia, continued in Europe and helped to lift rate back to Y79.00 but offers back in place here countered. Euro-yen was contained within Y99.60/77 through Asia, opening Europe around Y99.72. Risk demand for euros provided the momentum for an eventual break above Y100.00, touching a high at Y100.15
EasyForexNews Research Team