EUR: Opened early Europe at $1.2987, Euro-dollar closed in NY at $1.2972 after a fairly subdued US session as markets awaited the outcome of the Eurogroup meeting. A leaked report that a deal had been reached to cut Greek debt to 124% to GDP by 2020 sent rate up to an early Asian high of $1.3007, the move taking out barrier interest at $1.3000. A rival wire dampened this early ‘leak’ by reporting that talks were ongoing and prompted a pullback to $1.2969. Confirmation of the Greek debt deal bounced the rate to a high of $1.3010 but momentum quickly faded as move ran into profit take sales. The corrective pullback was given added weight on euro-yen sales which took rate back to $1.2974. The dip again attracted demand interest which allowed rate to recover to $1.2990 ahead of the European open. Strong demand into the European session was countered by Asian and middle eastern reserve supply. Weight of sales eventually squeezed rate lower with triggered stops below $1.2970 extending move to challenge stronger support at $1.2945/40 late morning.
GBP: Opened early Europe at $1.6040 and stg0.8097, GBP closed in NY at $1.6027, the rate trading with a buoyant tone after the announcement that BOC governor Carney would be the new BOE Governor come July 2013. Rate was lifted above Monday’s high at $1.6033 to $1.6035 on the initial Eurogroup leak that an agreement had been reached to lower Greek debt to GDP to 124% by 2020. However, a rival wire reported that talks were ongoing and dampened this initial enthusiasm which took rate back to $1.6025. Official announcement confirmed the earlier leak and saw rate spike to $1.6045, the move tracking euro-dollar reaction. Euro-sterling initially pushed higher with euro-dollar before it settled back below stg0.8100 through the Asian afternoon. Cable edged higher in early Europe to $1.6053 but struggled to build further. Rate eased, tracking euro-dollar slippage, as well as euro-sterling making a show above stg0.8100. Cable touched a low of $1.6016 before recovering into UK GDP data. Unchanged revision Q/Q took cable to $1.6030, the cross easing to stg0.8080/75.
JPY: Opened in early Europe at Y82.21 and Y106.80, japanese sales of euro-yen pre-Tokyo open triggered stops sub Y106.25, dollar-yen also pressed lower to trigger stops sub Y81.90. Euro-yen bounced off lows of Y106.18 and pushed up to Y106.77 as the euro gained a general boost on confirmation from Eurogoup officials who agreed on the next aid tranche for Greece in December. This recovery lifted dollar-yen off its lows of Y81.86 to Y82.09, while euro-yen extended its recovery to Y106.89. Late comments from LDP leader Abe that reiterated his stance to the BOJ about setting inflation targets at 2% and bold monetary easing, spiked dollar-yen to Y82.30 and the cross to Y106.90. Early demand in Europe lifted dollar-yen to Y82.32, before the rate stalled and eased on profit take sales, cross supply added further weight to Y82.04 and the rate sits heavy ahead of NY. Euro-yen lifted to highs of Y106.96, but met resistance ahead of Y107.00 and slipped to Y106.70. The cross tracked Swiss bank supply in euro-dollar, extending losses to Y106.20 and re-test the overnight Asian low.
EasyForexNews Research Team