EUR: Opened early Europe at $1.2755, Euro-dollar closed in NY at $1.2769 after rate had recovered off session lows of $1.2737, seen after rate had corrected off its post Obama re-election react highs of $1.2876. Rate extended its recovery to $1.2782 into early Asia as rate reacted to the Greek govt winning its latest austerity package vote, though by a slim majority. This early enthusiasm quickly faded and allowed rate to pullback to $1.2748, aided by Japanese sales of euro-yen. Rate recovered to $1.2766 before another round of selling pressed it down to $1.27643, with recovery efforts ahead of the European open holding below $1.2760. Early trade in Europe respected the Asian parameters, trade initially held within $1.2753-77 before an MNI Source story hit the wires. Suggestion that Spain will hold off asking for ESM aid this year, as well as ECB not keen to launch OMT bond buying triggered heavy sales which took rate through Wednesday’s low at $1.2737 to a low of $1.2722. Rate was holding heavy ahead of NY, reserve buys ahead of $1.2720 only able to smooth.
GBP: Opened early Europe at $1.5977 and stg0.7982, GBP closed in NY at $1.5990 having recovered off a session low of $1.5954, seen after the rate had been pulled off post Obama election react highs of $1.6043. Euro-sterling diverted part of this pressure as it eased to session lows of stg0.7971. Cable saw an early high of $1.5994 into Asian trade, as risk was given a brief boost on the Greek govt passing the latest austerity package. Sellers quickly emerged to press cable lower, as it tracked euro-dollar slippage, before finding support at $1.5970. Rate settled between $1.5970/80 through the Asian afternoon. Euro-sterling traded between stg0.79785-0.7993. Early trade into Europe saw rate hold $1.5980/90, slipped to $1.5970 as euro-dollar pressed lower. Downside momentum was boosted on reaction to an MNI source story on Spain, which weighed heavily on euro-dollar, taking cable to extended lows of $1.5930 as stops triggered on break of $1.5950 then $1.5940. Cross saw lows of stg0.7973 before edging to stg0.7990 which kept weight on cable ahead of the BOE MPC announcement at 1200GMT.
JPY: Opened in early Europe at Y79.90 and Y101.99, Dollar-yen traded flat in Asia around Y79.95 and squeezed lower as equities opened in negative territory. Safe-haven demand for Yen on US fiscal cliff concerns added weight and the pair extended to Y79.78, before finding support from Japanese names ahead of option related bids at Y79.75/70. Dollar ground higher to Y79.90 and settled in a tight range ahead of the European open. Euro-yen tracked dollar moves and slipped to lows of Y101.75, the rate later recovered to Y101.95 amid light flow. Dollar-yen eased to Y79.83 in early Europe before bouncing in tandem with euro-yen to Y79.95, trade continued light tied to a narrow range. The cross lifted off early lows of Y101.85 and extended recovery efforts to Y102.14, with the 200 dma seen capping moves on the topside. Market sentiment turned on the MNI sources story that said there is little chance Spain will seek ESM aid this year. The rate slipped sharply to Y101.90, heavy supply from a US investment house added weight flushing stops to Y101.63, later bouncing to Y101.80.
EasyForexNews Research Team