EUR: Opened early Europe at $1.2860, Euro-dollar closed in NY at $1.2813, after rate had recovered off session lows of $1.2764 to $1.2827, with reported offers placed at the 200-dma ($1.2828) providing the main resistance. US election exit polls/results began to filter through into the Asian session and acted to direct moves. Early exit polls from Florida favoured the Republican Romney and prompted dollar demand which pressed the rate to lows of $1.2783. However, as the night progressed and it looked increasingly likely that Pres. Obama would achieve the necessary electoral college votes to serve another 4-years it reversed the dollar’s course with strong sales then driving the rate to a session high of $1.2875. Rate met decent offers at the high, drifted off to $1.2855 before edging back around $1.2860 into Europe. Early demand in Europe retested the Asian high, extending topside to $1.2876 before stiff resistance prompted longs to pare. Rate squeezed lower, meeting support in the $1.2840/30 area before edging back toward $1.2850 ahead of NY.
GBP: Opened early Europe at $1.6032 and stg0.8021, GBP closed in NY at $1.5996, off its recovery high of $1.6008, seen after rate had seen lows earlier in the session of $1.5957. Exit polls/results from Tuesday’s US election acted to determine direction through Asian trade overnight, with early calls that Romney would win Florida providing the dollar an early boost that took cable to Asian lows of $1.5969. However, as results began to filter through and show Pres. Obama on course to gain the necessary Electoral College votes to win the dollar was sold back with rate pressured to a high of $1.6037 before momentum faded. Rate eased to $1.6022 before picking up fresh demand ahead of the European open. Risk on tone gained a boost into early Europe, the demand taking cable to extended highs of $1.6043 before momentum quickly faded. The corrective ease back was given added weight on Asian sovereign sales from above $1.6030, the rate squeezed to a low of $1.6000 before it settled around $1.6010 as market awaited the US reaction.
JPY: Opened in early Europe at Y80.10 and Y103.02, Dollar-yen opened in Asia at Y80.36 and headed lower on the sell-off in US yields to Y80.20 as traders watched the election unfold from the sidelines. The dollar extended losses and flushed stops on the move to Y79.81 as network projections pointed to a victory for President Obama. Demand ahead of option related bids at Y79.75/70 helped recover off lows and the pair settled in a tight range around Y80.00/10. Euro-yen slipped to lows of Y102.29, before tracking euro-dollar’s extended recovery to Y103.15 on reaction to early US election results. Cross demand lifted dollar-yen to Y80.33 in early Europe, the rate consolidated gains and ground to Y80.40, later easing to Y80.35 ahead of NY. Strong offers reported at Y80.50 with stops set, more offers behind at Y80.60 from exporters. Euro-yen opened on a bid tone and extended Asian gains to Y103.42, the rate met fast money sales but was well supported ahead of Y103.00. Late trade saw the cross lift to Y103.30 with strong offers reported at Y103.50, ahead of Y103.87 (17 Sep high).
EasyForexNews Research Team