EUR – Closed in NY Tuesday at $1.3456 after rate had seen a recovery off intraday lows of $1.3364 to $1.3476 before drifting off into the close. Rate settled the early part of the Asian session between $1.3445/60, extending lows to $1.3438 during afternoon trade before it settled between $1.3440/50 ahead of the European open. Headline reaction risk proved itself Tuesday as G7 comments, following the release of their Statement, tried in vain to clarify the Statement’s intention. Rate pressed back toward the overnight lows in early Europe but met decent demand that eventually spiked the rate up to $1.3472. Middle east and Swiss names were mentioned in the mox of buyers. Rate dipped to $1.3450 before attracting another round of demand, this time taking the rate on to $1.3485, as stops above $1.3480 were triggered. Move ran into strong supply, Asian sovereign and semi official supply noted, but pullbacks were shallow, main demand seen from euro crosses. Rate managed to extend highs to $1.3488 but offers placed through to $1.3500 continued to provide a decent hurdle against further gains. Rate drifted back below $1.3480, but cross demand continued to prop. US retail sales at 1330GMT to provide early NY focus.
GBP – Closed in NY Tuesday at $1.5673, just off its session highs of $1.5675, seen after rate had been pressed to lows of $1.5571, the dip meeting strong sovereign support ahead of the recovery. The move up was seen in tandem with euro-dollar, as the dollar gave ground, though sterling was able to take back some lost ground from the euro, euro-sterling easing off Tuesday highs of stg0.8632 to stg0.8591 into the NY close. Cable extended recovery highs to $1.5684 in early Asia, dipped to $1.5664 before resuming its climb, touching an overnight high at $1.5690. Rate was holding back around $1.5675/80 into Europe. Euro-sterling was contained within stg0.8572/86 through Asia, opening Europe around stg0.8574. Cable came under renewed pressure into Europe, early sales extended rate’s pullback to $1.5638 as corporate demand in the cross drove this rate to a high of stg0.86175. Cable recovered to $1.5665 before it settled between $1.5640/55 ahead of BOE’s Inflation Report. The cross was at stg0.8610. Sterling spiked higher on inflation forecasts, but dropped back on detail. Cable spiked to $1.5683 before dropping back to $1.5600, the cross dropping to
stg0.8588, driving up to stg0.86375.
JPY – Dollar-yen came under downside pressure in early Asian trade, offshore supply from various names added weight to print lows of Y92.83. Euro-yen tracked the move and slipped to Y124.78 as traders continued to pare long positions ahead of the weekend G20 meeting, with comment that yen will be discussed. Dip demand later recovered the pairs to Y93.05 and Y125.05. Euro-yen ground higher in early European trade to Y125.20, extending to Y125.75 on reported euro-dollar demand from a major Swiss bank. The cross later consolidated gains and settled in a tight range ahead of NY. On the topside strong offers seen into Y126.00, more behind at Y126.25/30. Dollar-yen was dragged higher by the cross and extended to Y93.40, before paring light gains ahead of NY, closing the morning around Y93.30. The Asian high at Y93.51 seen capping moves on the topside, strong offers behind into Y93.70.
EasyForexNews Research Team