EUR – Closed in NY Thursday at $1.3368, after rate had slowly recovered off its traded lows of $1.3315, seen during the European morning following reaction to release of weaker than forecast Eurozone GDP data. Rate drifted off that recovery area in early Asia, marking lows at $1.3348 before recovering to $1.3372. Rate again dropped to retest earlier lows before settling around $1.3360 into Europe. Early Europe was set for a day of headline react, with ECB Weidmann comments providing just that into the open. Comment that the ECB would not ease interest rates to soften the euro spiked euro-dollar to $1.3393 (38.2% $1.3520-1.3315), but offers placed into $1.3400 countered and prompted spec longs to cover back. Rate met initial demand at $1.3365 which allowed rate to edge back to $1.3381 before it turned lower again on cross driven trade. UK clearer sales of euro-yen and euro-sterling were cited as rate eased eased to challenge support between $1.3335/20. Break here took it below Thursday’s low at $1.3315 to $1.3311 before fresh demand emerged. ECB Draghi rhetoric about euro not being a policy target prompted some short covering but correction was capped below $1.3340.
GBP – Closed in NY Thursday at $1.5493 having recovered from a NY afternoon drop to $1.5475, the move seen taking out option barrier interest at $1.5485, as well as flushing out stops sub $1.5480 in a thin market. Rate eased to $1.5484 in early Asia before picking up fresh demand, which edged it to $1.5521 before momentum faded. Rate then drifted off through the Asian afternoon, meeting some demand interest ahead of $1.5500. Rate was trading around $1.5510 ahead of Europe. Euro-sterling, which had managed to extend its corrective pullback off Wednesday highs of stg0.8685 to stg0.8585 Thursday, recovered to stg0.8628 into the NY close, with trade in Asia able to press the rate down to stg0.86025 before recovering to stg0.8610 ahead of Europe. Sterling demand emerged in Europe, a UK clearer a noted buyer versus the euro and dollar which took the cross back below stg0.86 to stg0.8575, which in turn drove cable to $1.5550 where it met decent resistance. Cable had drifted to $1.5520 into UK retail sales, the negative headline figure surprising the market and prompted a sell off to $1.5470. The cross spiked to stg0.8617 on react. Second wave sterling sales extended cable to $1.5462 before it recovered toward $1.5500 late morning.
JPY – Dollar-yen opened on a bid tone in Asia, the rate pushed to session highs of Y93.12 with comments from LDP member Yamamoto that a dollar-yen of between Y95-100 would be appropriate, along with Gotobi demand into the Tokyo fix. Rate reversed off highs as source comments suggested Muto to be the leading candidate as next BOJ Governor, taking rate down to Y92.60. Leaked G20 draft suggesting Japan would not be named in the Comminique provided for the bounce to Y93.03. Supply from offshore/Japanese short term accs added weight during the Asian afternoon and pressed to Y92.25. Euro-yen tracked dollar moves and lifted to Y124.38 in early trade, sentiment faded and the rate later printed lows of Y123.20. Sharp euro-dollar slippage around the European open added weight to the yen pairs, along with Middle-eastern supply euro-yen slipped to Y122.89, flushing stops on the move. Dollar-yen extended the slow grind to Y92.22, before decent dip demand aided recoveries to Y92.60 and Y123.60 ahead of NY and the w/e G20 meetings.
EasyForexNews Research Team