EUR – Closed in NY Friday at $1.3360 after rate had recovered off lows at $1.3307 on IMF Lagarde comments supporting the recent euro strengthening/yen weakening moves, the reactive demand taking the rate to highs of $1.3376 before drifting off into the close. Rate marked highs at $1.3365 into opening Asian trade Monday before squeezing lower as it reacted to strong demand for dollar-yen following the weekend G20 Communique (failed to criticise Japan directly for recent currency devaluation). The move to $1.3326 was cushioned in part by demand for euro-yen, the move up in the cross eventually allowing euro-dollar to recover to $1.3345 into Europe. This recovery extended to $1.3353 into Europe before sellers emerged to press rate down to $1.3322. This move met strong demand, the semi official a noted buyer into the dip which prompted rate to recover to $1.3340. Strong demand for euro-yen , taking the rate through its pivot at Y125.70, boosted euro’s recovery, with Asian sovereign demand cited for spiking the rate to $1.3379. Move met good supply from US and Dutch names which eased it back to $1.3345 before settling toward $1.3360 late morning.
GBP – Closed in NY Friday at $1.5518 after rate had seen extended lows of $1.5462 before recovering to $1.5543 as sterling hitched a ride higher following yen’s sell off on G20 Communique draft release showing Japan not directly criticized for devaluing its currency. Cable drifted off those react highs but found support above $1.5510 into the close. Cable continued to drift lower into early Asia before if got shoved down to $1.5472, euro-sterling spiking up to stg0.8625 same time. Cable settled between $1.5475/95 through the balance of the session, while the cross settled between stg0.8605/15, though this rate was seen picking up fresh demand into early Europe. Cable edged to $1.5500 into early Europe, but recovery efforts attracted fresh supply, the weight of which eventually dropped it through barrier interest at $1.5450 before basing at $1.5438 as profit take buyers emerged to take advantage of the dip. Rate recovered, eventually hitting $1.5487 on reported middle eastern demand, and able to overcome a counter from US custodial cross buys which had shoved this rate to stg0.8648. The cross met decent resistance ahead of stg0.8650, the pullback providing cable buoyancy as it settled around $1.5470.
JPY – Following the G20 Communique release, without a direct criticism of Japan recent activity to weaken its currency, the yen came under fresh pressure into Asia Monday. Dollar-yen, which had been pressured back up to Y93.84 on reaction to leaked the G20 draft, closed the week at Y93.50, with Asia able to step this rate up to an overnight high of Y94.22, settling back between Y93.85/94.00. A similar move for euro-yen, but with euro-dollar under pressure, the recovery was less impressive. However, the rate closed NY at Y124.96, off session highs of Y125.28, with the extended move up in Asia touching Y125.69 before it settled back between Y125.20/50. The yen pairs opened flat in Europe with trade tied to narrow ranges due to the NY holiday. Semi-official demand lifted euro-yen off early lows of Y125.11 and settled around Y125.40. The cross spiked to Y125.90 as traders reported of agressive buying from Funds and Asian names, Dutch bank supply checked moves, paring light gains to Y125.60. Dollar-yen tracked the move to Y94.12, later easing to Y94.00.
EasyForexNews Research Team