EUR – Closed in NY Thursday at $1.3375 after rate had seen a strong rally to $1.3393 on positioning ahead of today’s LTRO repayment announcement. Rate saw an early high of $1.3380 into early Asian trading before resuming the corrective pullback, the rate pressed to $1.3350 before meeting demand into the dip. Rate recovered to $1.3367, dipped to $1.3353 before pushing to $1.3372 ahead of the European open. Strong demand across e-platforms into Europe, with Asian demand also noted, provided the early push higher, the rate moving above Thursday’s NY high at $1.3393 before triggering stops through $1.3405/10. This added demand edged rate on to $1.3420. Sell interest here countered. Rate remained buoyed above $1.3400 getting a second wave of demand ahead of Germany Ifo release. A stronger than expected headline number lifted rate on to $1.3430, extending on to an eventual high of $1.3452 as barrier interest at $1.3450 was taken out. Spec longs were then pared back, booking partial profit as positions were adjusted ahead of key ECB LTRO repayment data release at 1100GMT, easing rate back to $1.3435.
GBP – Closed in NY at $1.5788 after sterling had come under pressure during the session as traders adjusted positions ahead of today’s UK Q4 GDP release. Cable saw lows of $1.5758, with strong demand in euro-sterling, linked to general euro demand positioning ahead of today’s LTRO repayment announcement at 1100GMT, drove rate to stg0.8481. Despite reports of decent demand in sterling-yen through Asia, sterling continued to trade with an underlying softer tone, cable easing to $1.5762 ahead of Europe, while euro-sterling pressured the stg0.8480/85 area. The cross tracked the early demand for euro-dollar, touching stg0.8499, but was rejected ahead of barrier interest at stg0.8500. A dip to stg0.8480 met stronger demand that lifted it back, release of strong Germany Ifo data taking it above stg0.8500 and on to stg0.8530. Moves provided a counter to cable as it attempted to track euro-dollar’s rally, though rate was able to edge to $1.5821 ahead of UK GDP data. Cable was trading $1.5815, the cross at stg0.8497 into data, the poor number dropping cable to $1.5745, taking the cross to stg0.8536. Cable recovered to $1.5780 on profit take buys while the cross eased to stg0.8510 as euro longs were pared ahead of LTRO release.
JPY – Early Asian demand lifted dollar-yen to highs of Y90.69, flushing stops on the move. Momentum faded on approach to Y90.70 as traders were reminded of the Y86.75-90.75 DNT option structure in play. Protective selling prevented the trigger and prompted short term specs to cover back/take profit. Rate touched a low of Y90.29, before picking up fresh Gotobi day demand into the Tokyo fix which edged rate back to Y90.60. Euro-yen tracked dollar moves and extended the recovery to Y121.31, later settling around Y121.00. Risk appetite continued in Europe as euro-yen took out the Y121.50 barrier in early trade. Release of stronger than expected German IFO Business Climate data extended gains through the Y122.00 barrier, flushing stops to print 21 month highs of Y122.20. Dollar-yen tracked the move and triggered the earlier mentioned DNT option structure to highs of Y90.91. Late profit take sales eased to Y90.82, the cross to Y121.95 ahead of NY.
EasyForexNews Research Team