EUR – Closed in NY Friday at $1.3069, off recovery highs of $1.3090, seen after the release of US jobs data saw pressure resume versus the dollar via softer UST yields. The risk on tone seen late Friday resurrected itself into early Asia allowing rate to edge to $1.3088 as it tracked early demand for euro-yen. However, the Tokyo fix saw decent euro-yen supply hit the market which dropped euro-dollar to $1.3043. Rate recovered to $1.3066 only to drop to $1.3029 as euro-yen recovery was met by corporate supply. Recovery off the lows continued into early Europe, the rate edging to $1.3055 before getting knocked back by reported European sovereign sales. Rate extended lows to $1.3017 before fresh demand emerged. An initial slow recovery gained pace on Asian sovereign buys which took it to $1.3044 before momentum faded. Talk of large LHS interest to be seen at the ECB fix at 1315GMT has acted to counter recovery efforts, with demand linked to option expiries at $1.3025-00, along with Asian reserve demand between $1.3010/00, providing some underpinning.
GBP – Closed in NY Friday at $1.6069, off post US jobs data recovery highs of $1.6081. Rate retained a firm tone into early Asia on Friday’s post jobs data risk-on tone, the rate touching a high of $1.6082 before reversing, the move down to $1.6043 tracked euro-dollar, which in turn was influenced by euro-yen. Rate recovered to $1.6062 before turning lower again, touching $1.6022 ahead of the European open. Euro-sterling saw an early recovery high of stg0.8140 into Asia only to retrace this move through the session, retesting Friday’s pullback low (off stg0.8143 post US jobs) at stg0.8129. Euro-dollar’s attempt to recover overnight losses into Europe was thwarted by European sovereign supply which took this rate down to $1.3017 and in turn euro-sterling was able to extend its pullback to stg0.81125 as cable was basically ignored and allowed to retain an underlying buoyant tone, closing the morning around $1.6060.
JPY – Euro-yen extended its recovery off post US jobs lows of Y114.28 in early Asia to Y115.56. This early trend reversed at the Tokyo fix as sellers emerged, comments from FinMin Aso added further weight. Japan Softbank shares then tumbled as market reacted to a Friday report putting their acquisition of Sprint Nextel in jeopardy, which led dollar-yen to make a show under Y88.00. Euro-yen gapped through Y115.30 to Y114.80 before both pairs met importer demand interest. Recovery efforts were capped at Y88.18 and Y115.15 before Japanese corporates sold back into the move taking dollar-yen to Y87.69/euro-yen to Y114.31 as stops through Y114.50 were triggered. Early demand in Europe lifted dollar-yen to Y87.86, the rate soon met resistance from corporate names and slipped to Y87.62. Dip demand bounced, the rate extended to Y87.80 and with talk of a large option strike at Y87.75 traders expect selling on rallies to continue. Euro-yen initially lifted to Y114.69, before official name supply pared gains to Y114.11, the cross later recovered with the dollar to Y114.60.
EasyForexNews Research Team