EUR – Rate closed in NY at $1.3318 after recovering off a low of $1.3265 following its corrective pullback from earlier highs of $1.3355. Rate had seen a recovery high of $1.3324 ahead of the NY close with the corrective pullback from here continuing into early Asia. Rate squeezed to an early low of $1.3297 as traders reacted to disappointing Apple results (after the bell), with sales of euro-yen providing the main weight. Release of better than expected China PMI data reversed this early tone and took rate up to $1.3325 before momentum faded. Rate drifted off to $1.3306, recovering to $1.3313 into Europe. Early macro demand extended highs to $1.3347 but momentum quickly faded on order exhaustion. Rate drifted to $1.3330 ahead of French flash PMI release. Weak data dropped rate to $1.3286, the dip attracting demand that corrected it back above $1.3290 into German PMI release. Strong data from this region spiked rate to $1.3336 as traders linked react moves to automated trading. Euro cross sales countered the move, taking it back to $1.3309, but Eurozone PMI on the stronger side allowed rate to push up to $1.3343. This recovery again met headwind sales ahead of $1.3350, drifting off to $1.3313 before picking up fresh demand late morning.
GBP – Closed in NY at $1.5844 after rate had recovered off a corrective pullback low of $1.5830. Rate stepped its way to an early low of $1.5812 in opening Asian trade, but move remained wary of retesting recent lows ahead of $1.5800, market aware that decent demand sits ahead of $1.5800 (barrier protection). Release of stronger than forecast China PMI data saw rate recover to $1.5835 before momentum faded and it drifted off to $1.5828 ahead of the European open. Cable dipped to $1.5821 into Europe, as euro-sterling spiked to stg0.8424, but this move attracted sterling buyers which took the cross back toward stg0.8400, and cable back to retest overnight highs. Release of weak French PMI data dropped the cross to stg0.8391 which took cable to $1.5852 (50% $1.5892-12), but German PMI came in strong and bounced the cross to stg0.8410. This move in the cross met decent supply, which provided cable with some buoyancy as it eased off highs, trading around $1.5830 in late morning trade, while the cross was holding steady around stg0.8415. Focus remains on Friday’s key Q4 GDP release with traders expecting this to determine direction into next week.
JPY – Dollar-yen opened flat in Asia around Y89.50 with trade tied to a narrow 20 pip range. Release of stronger than expected HSBC mfg PMI data lifted the pair to Y88.80, risk appetite continued with leveraged demand extending to Y89.30, flushing stops on the move. Profit take sales eased before the rate spiked to Y89.45 on headlines from Japan’s Nishimura that said dollar-yen at Y100.00 would not be a problem, he added, a level of Y110-120 however would raise import costs. Euro-yen mirrored dollar moves with demand from lifers extending the rate through Y119.00 to Y119.20. The cross opened heavy in Europe and pressed lower on release of weak French mfg PMI data to Y118.64, before support in the dip cushioned moves. Euro-yen pared early losses on release of strong German mfg PMI and extended to Y119.58 with an Asian sovereign behind the move. Dollar-yen opened flat in Europe before lifting with the cross to Y89.72, late trade eased to Y89.60 ahead of NY. The underlying tone remains buoyant with strong offers seen layered into Y90.00.
EasyForexNews Research Team