GBP: Opened early Europe at $1.6118, stg0.8019, Cable closed in NY at $1.6108, having seen highs intraday of $1.6131 before pulling back to $1.6081. Rate remained above $1.6100 through Asia, marked early lows at $1.6104 before edging higher through the session to $1.6125. A quick drop back to $1.6105 met fresh demand which lifted it back to $1.6120 into the European open. Rate came under fresh pressure into early Europe, as the cross nudged up to stg0.8025 (Asia range stg0.80085/0.80205), traded to an extended low of $1.6102 before bouncing back. The recovery saw rate retest overnight highs at $1.6125 where it met corporate supply, said to have locked in dollars at the softer levels. Cable eased to $1.6110 before recovering back to settle toward $1.6120. The stronger performance in cable allowed euro-sterling to squeeze down to retest Asia low in late morning trade. Markets in general was mainly subdued, with trade contained within tight ranges, as traders await this evening’s US FOMC policy decision.
EUR: Opened early Europe at $1.2925, Euro-dollar closed in NY at $1.2900 after pulling back from a session high of $1.2937 to $1.2884. Rate eased to an early low in Asia at $1.2896 before picking up fresh demand, the move up gaining some slight momentum as early predictions on the Dutch election result showed a pro-Europe win. A dip to $1.2912 drew buyers that took rate on to $1.2930 where it met stronger supply which capped. Rate opened Europe around $1.2925 with early demand seen from euro-Aussie buys, taking it up to retest overnight highs, posting $1.2931 before momentum faded. Corporate sellers emerged to lock in dollars at current soft levels, the weight taking the rate to Europe morning lows of $1.2906. Demand placed ahead of a well reported digital option strike at $1.2900 (expires at the NY cut, payout if above) kept rate buoyed and allowed for a drift back up to $1.2928. Markets have been fairly subdued with attention turned toward this evening’s US FOMC policy announcement.
JPY: Opened in early Europe around Y77.73 and Y100.47, Dollar-yen trade through Asia was contained within a tight range of Y77.71/86. Rate came under pressure into early Europe, early sales taking it below recent lows at Y77.70 to Y77.65 before meeting decent demand. Rate recovered to Y77.74 only to find fresh sell interest that took rate below Y77.65, the move triggering stops that extended the base to Y77.58. The move prompted comments from Japan’s Nakao that yen demand was seen as speculative, not reflecting current Japan economy. Rate recovered to Y77.70 ahead of the NY open. Dollar-yen expected to be the main react vehicle at tonight’s US FOMC policy announcement. If extended period language moves out to 2015 and/or QE3 then this will weigh on US yields and prompt a move into yen. However, market expecting counter intervention from the BOJ should this occur. Euro-yen was contained in Asia within Y100.32/52 with the yen demand seen in dollar-yen able to press rate to extended lows of Y100.20 in Europe, trading back above Y100.40 ahead of NY.
EasyForexNews Research Team