EUR – Opened early Europe at $1.3108, Euro-dollar closed in NY at $1.3092 after fading away from a late recovery high of $1.3108 with corrective dips noticeably continuing to draw willing buyers. A positive opening in Chinese stocks provided the early risk-on boost, demand for euro-yen triggering demand in euro-dollar. Barrier interest at $1.3110 was triggered, with stops above lifting it on to an initial high of $1.3117. A dip to $1.3097 was met by another round of buying which extended the rally to $1.3125. Rate drifted lower, opening Europe around $1.3108. Fresh demand emerged into Europe, extending highs to $1.3127 but sell interest placed between $1.3125/40 proved too strong, and with supply from the semi-official around $1.3125, the rate backed off to $1.3107. Short term uptrend support from Monday lows supported around $1.3105 and allowed for a recovery to $1.3117 but struggled to build further. Release of Eurozone PMI data had little effect, but a disappointing Spanish bond auction, followed by poor EMU retail sales acted to press rate down to $1.3086.
GBP – Opened early Europe at $1.6107 and stg0.8137, GBP closed in NY at $1.6100 after recovering off $1.6089 (having seen an intraday high of $1.6131), with sterling retaining an underlying buoyant tone. The positive opening in Chinese stocks provided risk with an added boost into Asia, initial demand lifting cable to $1.6109. A pullback to $1.6094 was greeted by willing buyers that took it back above $1.6100 and on to $1.6119 ($1.6121 76.4% $1.6131-1.6090) where it met offers toward $1.6120. Cable eased off to $1.6103 into Europe before bouncing to $1.6117 on early demand but move trailed euro-dollar’s rally and allowed the cross to extend its recovery to stg0.8147. The cross holding gains pressed cable back to $1.6100 ahead of UK services PMI. Headline number was below forecast but held above 50.0, with reaction seen limited as rate held around $1.6100. Euro-dollar slippage on a disappointing Spain bond auction and weak EMU retail sales pressed on euro-dollar and eased cable to retest Asia lows, though the cross diverted some pressure as it eased to stg0.8130.
JPY – Opened in early Europe at Y82.29 and Y107.90, the positive opening in China stocks provided risk with an early boost into Asian trade with strong demand for euro-yen leading the moves. Rate bounced off an early low at Y107.14, with stops through Y107.50 driven by US name buys for a macro account, with US custodial buys then taking it above Y107.65 before it touched a high of Y107.96. Dollar-yen reacted to the euro-yen rally, the move up from around Y81.80 saw stops triggered on the break of Y82.00, the added momentum lifting it on to a high of Y82.34. Dollar-yen extended the corrective pullback off Asian highs and ground slowly through the session to Y82.15, with trade volumes light, tied to a narrow range. Late trade bounced to Y82.23 ahead of the NY open. Euro-yen remained in consolidation mode and lifted with euro-dollar to re-test overnight highs of Y107.96, before strong supply ahead of the Y108.00 barrier eased. A semi-official on the offer extended losses, soft eurozone Retail Sales data added weight and the cross printed lows of Y107.52, later bouncing to Y107.65.
EasyForexNews Research Team