Closed in NY at $1.3115, after rate had been pressured to a high through the NY session at $1.3120 on general dollar losses. Early Asia extended this recovery to $1.3128. Rate eased lower, gaining momentum on the back of post Tokyo fix euro-yen sales that took rate back to post overnight lows at $1.3104. Rate jumped back to $1.3130 on reaction to Japanese FinMin Aso comments that Japan will use FX reserves to buy ESM bonds. Further demand extended the reaction to $1.3140 before rate met decent supply, with offers to be placed between $1.3140/50. Rate drifted back to $1.3117 before settling between $1.3120/30 into Europe. Traders note that ESM is expected to launch long term funding in 2H 2013. The Japan FinMin comment was seen euro-dollar positive, following on from recent similar comments from BOK and PBOC, and seen highlighting the reserve diversification away from the dollar. ESM funding expected to launch H2 2013. Offers remain $1.3140/50, a break to open a move toward $1.3180/85 ($1.3185 61.8% $1.3300-1.2998). Support $1.3105/00, $1.3080. Busy morning for German and EZ data, though Thursday’s ECB rate decision and press conference overshadows.
EasyForexNews Research Team