EUR – Closed in NY at $1.3456 after a recovery off NY session lows of $1.3431. Rate eased to $1.3444 in opening Asian trade with rate contained for the early part of the Asian day within a basic $1.3445/55 range. Rate touched an overnight low at $1.3443 before euro-yen demand emerged to drive it higher, the rate posting a high of $1.3461 before momentum faded. Rate drifted off highs into Europe, opening the session around $1.3448 before continuing to slide, the rate touching a low of $1.3429 before meeting decent demand. Rate recovered to $1.3459, but failure to move above the earlier high prompted sellers to emerge and ease rate back to the $1.3440 area. A fairly subdued European morning, following on from a quiet Asian session, with market already looking toward Wednesday’s FOMC announcement, Thursday month-end and Friday US Employment Report. Euro-dollar seen support by demand from around $1.3430 through to $1.3400, while resistance remains in place from $1.3470 through to well reported barriers at $1.3500.
GBP – Closed in NY at $1.5692 after rate had been pressured to extended lows of $1.5674 following the triggering of option barriers at $1.5700 and $1.5680, with recovery efforts ahead of the close capped below $1.5700. Cable posted early Asian lows at $1.5686 before performing a steady climb higher through the overnight session, trading to a high of $1.5708 ahead of the European open. Euro-sterling, which has been seen as the main driver of sterling’s recent losses over the past few sessions, had seen highs of stg0.8586 in NY, with trade in Asia seeing rate extend its corrective pullback from there, opening the session around highs of stg0.8574 before drifting off to stg0.8563 into Europe. US bank name emerged as a stand out seller of the cross into Europe, taking the rate to lows of stg0.85475. This move provided cable with some added buoyancy, the rate able to extend its recovery through the overnight high, edging on to $1.5727 (76.4% $1.5743-1.5674) before stalling. Corrective pullback remained above $1.5700, while euro-sterling retained a heavy feel despite reported fix demand and the positive euro react to the MRO take up. The longer term outlook for sterling however remains negative.
JPY – Dollar-yen and euro-yen came under early sell pressure into Asia, with moves targeting stops placed sub Y90.50 and Y121.60 that took rates to early lows at Y90.40 and Y121.56 respectively. The Nikkei, which had opened on a negative tone, quickly pared losses and moved into positive, the recovery taking dollar-yen and euro-yen up to Y91.02/Y122.45, before losing momentum. Dollar-yen opened flat in Europe with trade tied to a narrow Y90.49-79 range. Rate extended the slow grind lower to Y90.49 before meeting support ahead of strong demand into Y90.45/40. Traders reminded of large option interest due to roll off on Thursday, the strikes between Y90.00-91.50 and expected to contain the rate ahead of Fridays US employment data. Euro-yen largely tracked dollar moves and slipped to lows of Y121.64, before lifting in tandem with euro-dollar’s extended recovery to Y122.05. Fresh sales added weight to Y121.62 with strong support seen into Y121.55/50.
EasyForexNews Research Team