EUR: Opened in early Europe at $1.2923, recovery attempts around the NY close continued into Asia, extending to $1.2924 before getting knocked back to $1.2910, but the dip quickly attracted fresh demand that saw rate edging toward resistance in the $1.2930/40 area. The move up seen driven via the crosses, demand in euro-Aussie and euro-yen the main pairs noted. The move up in the euro seen despite reports that the Troika is demanding that Greece increases the amount of spending cuts. Euro cross demand lifted the rate to $1.2954 in early Europe as the risk rally continued with a break of $1.3000 the target. Comments from EU officials that suggested Germany want to delay the decision on a Greek payment until November weighed on markets and the rate slipped to $1.2930. Spanish/French auctions that didn’t disappoint gave the pair a brief lift, before settling around $1.2935 ahead of NY. Focus today on the ECB rate decision at 1145GMT ahead of the press conference at 1230GMT. No change in rates is widely expected.
GBP: Opened in early Europe at $1.6098 and stg0.8027, GBP closed in NY near intraday lows of $1.6067 after sterling continued its recent corrective pullback following another set of disappointing data. However, with euro-sterling holding a tight stg0.8020/30 range through the Asian session cable tracked euro-dollar’s recovery, meeting initial resistance at $1.6100, before a bounce off $1.6080 took it on to session highs of $1.6106 into the European open. Cable opened on a bid tone in thin European trade and made a show above $1.6100, extending to $1.6134. The rate was unable to consolidate gains and slipped in tandem with euro-dollar, profit take sales also noted behind the move. The pair settled around $1.6110 ahead of the BOE MPC rate announcement, where no change is widely expected. Early macro demand lifted euro-sterling to stg0.8038, the move stalled on cables bounce and slipped to stg0.8022, later recovering to stg0.8030.
JPY: Opened in early Europe at Y78.59 and Y101.57, Dollar-yen ground lower in early Asian trade to Y78.42 before dip demand recovered and settled in a tight range with many on the sidelines ahead of tomorrow’s BOJ interest rate decision. Leverage demand bounced to Y78.60, rate extended to highs of Y78.71, later easing on Asian corporate supply ahead of Europe. Euro-yen traded flat through the Tokyo fix before the same leverage demand lifted to Y101.60, flushing CTA stops on the move. The cross extended to Y101.78 on reported US names/model funds, later easing to Y101.60. Tight range trade continued in Europe and the pair ground to lows of Y78.50, before bouncing to Y78.55 as traders look to US Initial Jobless claims data for direction. Macro demand lifted euro-yen to Y101.82 in early trade, before sliding in tandem with euro-dollar to Y101.49 on EU comments that said no decision had been made in the monthly meetings for a 31.5Bln Greek payment. The cross bounced off lows to settle around Y101.65 with focus on the ECB rate announcement.
EasyForexNews Research Team