EUR – Closed in NY at $1.3061 after it had pulled back from an early NY recovery of $1.3080 to $1.3046 before recovering into the close. Rate reversed into early Asia, slipping to an overnight low of $1.3039 (just shy of Wednesday lows at $1.3037 as position adjustment ahead of today’s ECB rate decision/press conference looked to pare euro longs. The move down was given added weight as the strong release of Chinese trade data boosted the Aussie dollar across the board, with sales of euro-Aussie keeping recovery efforts in euro-dollar capped around $1.3050. Rate had settled between $1.3042/47 into Europe. Asian sovereign dollar recycling, from recent dollar buy interventions, greeted early Europe, with demand for euro-dollar taking the rate to an early recovery high of $1.3075. Rate eased to the $1.3060 area before Middle Eastern demand emerged (selling dollars fro euro and sterling) which lifted the rate back above $1.3070 into Spain bond auction results. A good auction boosted the move, taking rate through resistance at $1.3090/00 and on to $1.3107. Rate was holding firm ahead of NY and the ECB meeting.
GBP – Closed in NY at $1.6024 after rate had recovered off a NY low of $1.5992 to $1.6033 before easing into the close. Rate continued to slip lower into Asia, tracking early pressure on the euro as the cross pivoted stg0.8150 in a tight stg0.8145-54 range, posting an overnight low at $1.6005 before bouncing back to $1.6022. Rate again drifted off in the Asian afternoon, finding support around $1.6008 before recovering ahead of the European open to $1.6015. This recovery extended into early Europe, the move aided by Asian sovereign dollar recycling, which took rate to an early high of $1.6031. Rate eased back to $1.6008, as the cross broke above stg0.8165, but dip attracted strong middle eastern demand which lifted it to an eventual high of $1.6053. Rate retained an underlying firm tone with rate able to extend to $1.6055 in late morning ($1.6055 76.4% $1.6075/1.5992), as it tracked euro-dollar’s added recovery boost following the Spain bond auction, with the cross struggling to build on its move above stg0.8165.
JPY – Japanese demand in early Asia lifted through Y88.00, some suggested it was in reaction to a local press report that said the BOJ will embark on further easing at the next meeting on Jan22. The rate extended gains and flushed stops on the move to Y88.22. Profit take sales eased with support into Y88.00 cushioning moves, the rate later bounced to close at Y88.15. Euro-yen was dragged higher by the dollar-yen move but euro weakness ahead of today’s ECB meeting was seen applying brakes to upside progress, closing at Y115.00. Dollar-yen opened on a bid tone in Europe and lifted to highs of Y88.30, UK clearer supply pared light gains but the rate met support from Japanese banks and settled in a tight range. Fresh sales from Middle-eastern names pressed and the dollar ground to Y88.05 ahead of NY. Euro-yen tracked the dollar to Y115.40, before drifting back to opening levels. Risk appetite increased and after awell received Spanish auction, followed by euro-dollar’s clean break of $1.3100 the rate extended to Y115.50, later easing to Y115.38.
EasyForexNews Research Team