EUR – Closed in NY Wednesday at $1.3523, the rate having extended its corrective pullback off Wednesday’s Asian highs of $1.3597 to $1.3496, recovering to $1.3544 before easing again into the close. A fairly subdued start in Asia with rate holding around $1.3520 before it got pressed down to $1.3505. Rate met demand into the figure which cushioned the move prompting a recovery ahead of the European open which edged rate up to $1.3532. Rate was trading around $1.3528 into Europe. Rate picked up fresh demand into Europe, the rate able to retest Wednesday’s NY recovery high at $1.3544 but offers here again countered and prompted spec longs to cover back which took rate back to $1.3520. Middle eastern demand emerged into the dip, buying seen here and in cable, with the buying able to drive the rate up to $1.3578 before momentum faded. The corrective pullback to $1.3547 seen as rate reacted to the sharp drop in euro-sterling as the pound spiked higher on Carney comments on withdrawal from unconventional policy for the BOE. Rate recovered above $1.3560 with attention turning to ECB rate decisions/press conference at 1245/1330GMT respectively (no rate change expected).
GBP – Closed in NY at $1.5666, the rate having spent Wednesday consolidating above key trend line support at $1.5630, touching a recovery high, off recently posted lows between $1.5630/32, at $1.5678. Positioning ahead of today’s appearance of BOE governor in wait Mark Carney in front of the TSC was in focus, yesterday’s slight recovery in sterling seen on suggestions that he may not be as dovish as recent interviews would suggest, though market was seen retaining its underlying negative tone toward sterling. Cable was held between $1.5646-73 in Asia, opening Europe just off highs. Rate dipped to $1.5646 in opening trade but quickly picked up demand interest. Middle eastern demand provided a boost that drove rate up to $1.5695 before it settled back around $1.5660 ahead of UK data. Stronger than forecast UK IP/mfg output data, and narrowing in trade deficit, took cable to $1.5677 before it settled around $1.5670 awaiting Carney. Wire headline of Carney saying BOE must exit unconventional policy spiked cable to a high of $1.5768 before Asian sovereign sales countered. Rate settled around $1.5710/20. Traders turn attention to the BOE rate/QE decision at 1200GMT, as well as comment on maturing stg6.1bln gilt.
JPY – Dollar-yen opened heavy in Asia and slipped through the Tokyo fix to print lows of Y93.30, before support in the dip aided recovery efforts. Release of Machinery Orders, alongside demand from various Japanese names extended gains to Y93.71. Euro-yen largely tracked dollar moves and slipped to Y126.04 in early Asia, later recovering to Y126.80. Profit take sales late Asia/early Europe pressed dollar-yen to Y93.46 and euro-yen to Y126.36. US name demand lifted dollar off lows, strong support in the crosses extended to Y93.90 where the underlying tone remains buoyant ahead of NY. Strong offers reported at Y94.00, through here and stops on a break of Y94.10, offers behind protecting the Y94.25 barrier. Euro-yen bounced in early Europe and lifted in tandem with euro-dollar on Middle-Eastern demand to Y126.90. Risk appetite continued and the cross made a show above Y127.00, extending to Y127.43. Strong offers seen at Y127.50, more behind at Y127.70/75.
EasyForexNews Research Team