EUR – Closed Monday’s North American devoid session at $1.3352, the rate having seen a range of $1.3322-79 during the day, recovering off a late dip to $1.3333 into the close. Rate initially spiked to $1.3365 in early Asia before dropping back to mark lows at $1.3339 before it slowly recovered through the Asian afternoon to settle around $1.3350 into Europe. Rate edged back to $1.3361 in early Europe but met decent supply that reversed this move, the main selling said to have come via euro-yen with middle eastern sellers cited. Euro-dollar dropped to $1.3334 before attracting demand, the rate then recovering to $1.3364 as it tracked euro-yen’s bounce away from the Y124.55/50 support area. Euro-dollar eased to $1.3345, as traders adjusted positions into the Germany ZEW release. However, a strong headline number spiked rate to $1.3373 but move only attracted fresh supply that pressed rate back to $1.3336 before it settled back around $1.3350. Rate remains range bound, awaiting NY influence as this market returns after their long weekend. Euro-seen contained by suggested sovereign demand interest between $1.3320/00, opposed by offers placed between $1.3380/00. Stops noted below $1.3300, but buyers said to await dips into $1.3280/70.
GBP – Closed Monday at $1.5472, the rate having extended recent lows to $1.5438 earlier in the day before taking out stops above $1.5500, drifting off to $1.5457 ahead of the close. Rate extended this late recovery to $1.5480 into early Asia, but move lacked the momentum to retest the $1.5500/10 area, reversing to $1.5461 before recovering to $1.5475 into Europe. Moves basically tracked euro-dollar, the cross contained within a relatively tight stg0.86235/0.86325. Cable’s recovery extended to $1.5490 in early Europe but failed to find the momentum again to extend move to challenge the $1.5500/10 area, the cross breaking lower only to meet decent support in the area between stg0.8615/00. Dip to $1.5480 attracted fresh demand, a UK clearer a stand out buyer as rate moved above $1.5500 to $1.5505, with middle eastern interest and UK insurance companies repatriating US funds linked to the demand. Rate eased off to $1.5485 before nudging back to $1.5495, release of strong ZEW data taking the cross above stg0.8630 pressed cable to $1.5483. However, sterling dips continued to attract buyers allowing cable to edge back toward $1.5500, euro-sterling easing back to resume pressure on the stg0.8615/00 area.
JPY – Opened in early Europe at Y93.64 and Y125.07 Dollar-yen came under heavy selling into Asia and extended its corrective pullback to Y93.57, traders linked the move to comments from FinMin Aso that the government was not currently considering revisions to BOJ law, as well as not considering the purchase of foreign bonds. Rate recovered to Y93.92 before momentum faded, later settling between Y93.60/70 as the BOJ Minutes contained no major surprises. Euro-yen extended losses in early Asia to Y124.88 as it tracked dollar-yen’s reaction to Aso comments, before recovering to Y125.20. Yen pairs opened on the defensive in Europe, extending losses to Y93.35 and Y124.55 on Middle-Eastern supply, comments from FinMin Aso that yen’s unexpected drop is the result of policy also attributing to the move. Demand in the dip aided recovery efforts and extended on a well received Spanish auction to Y93.55 and Y124.95. Risk appetite continued and the cross spiked to Y125.26 on release of much stronger than expected German ZEW survey, later easing to Y125.00. Dollar settled around Y93.60.
EasyForexNews Research Team