EUR: Opened early Europe at $1.3015, Euro-dollar closed in NY at $1.3020 after settling back from seeing extended highs of $1.3032, before pulling back to $1.3008 ahead of the close. Early demand into Asia met headwind sales above $1.3020 which restricted recovery to $1.3023, with corrective pullbacks restricted to $1.3010. US Employment Report at 1230GMT the main focus on the day and acted to subdue trade ahead of release. CitiFX Wire suggest that this release could be seen as more politically sensitive than Nov’s release (Oct data) adding that a strong number would be good for risk generally and prompt dollar sales, though a weak number would prompt knee jerk risk aversion dollar demand, but if seen could support a Romney win and provide for risk appetite when the analysts give their view (funds already seen switching out of dollars after the recent debate). Subdued trade rolled over into Europe, leveraged sales extending pullback lows to $1.2994 but move met willing buyers that edged it back above $1.3000 ahead of the NY open. Position adjustments continue ahead of data.
GBP: Opened early Europe at $1.6193 and stg0.8037, GBP closed in NY at $1.6193, off recovery highs at $1.6203, with rate recovering off a pullback low of $1.6180 into the close. Rate met resistance at $1.6196 in early Asian trade before drifting off to $1.6184, before settling between $1.6188/95 through a subdued, pre-US employment Report, session. Euro-sterling was contained by stg0.8035/43, as rate consolidated another extension to its recovery that had seen rate post intraday highs Thursday of stg0.8052. As mentioned, key event today is the US Employment Report, a strong number expected to provide an added boost to risk and should allow cable to edge higher, though again it would be seen driven by stronger euro-dollar demand, which in turn would continue to lift euro-sterling. A weak number expected to prompt knee jerk risk aversion but demand expected to quickly emerge into any resulting dip. Position adjustments in Europe saw a further paring back of cable longs, the rate easing to an extended low of $1.6173, but demand into $1.6170 provided decent buoyancy.
JPY: Opened in early Europe at Y78.40 and Y101.97, Dollar-yen opened in Asia around Y78.50, before “multiple-of-five” demand at the Tokyo fix took the pair to a session high Y78.58. The rate slipped from best levels after the fix, with a lack of follow-through buying, settling around Y78.45 ahead of the BOJ. The BOJ stood pat on both rates and QE, as expected, but again downgraded the outlook for the economy. This pushed dollar-yen to a session low at Y77.27, as the market looks to the next meet and further possible QE. Euro-yen mirrored dollar moves, lifting to Y102.28 around the fix, before easing to Y101.90. Dollar-yen opened flat in Europe and traded a very tight Y78.36-48 range as focus turns to US Non-farm payroll data released at 1230GMT, for direction. Euro-yen opened soft and looked to challenge the overnight Asian low (Y101.86), before US custodian demand in euro-dollar recovered, extending through Y102.00 to Y102.10. Resistance seen at Y102.25/27 (61.8% of Sep pullback, Asian high), a break to strong offers at Y102.50.
EasyForexNews Research Team