EUR – Closed in NY Tuesday at $1.3388, just off recovery highs at $1.3396 with the earlier release of a stronger than forecast Germany ZEW cited for providing the buoyancy. Rate had settled between $1.3385/95 through the main part of the NY afternoon into the close. Rate picked up fresh demand interest into the transition from NY into Asia, a UK clearer and a French name noted buyers as rate edged through supply in the $1.3400/10 area. Rate progressed to $1.3434, after stops above $1.3425 were triggered, but momentum then faded. Rate drifted off, finding support ahead of $1.3400 ($1.3406 pullback low) before edging back above $1.3410 into Europe. Rate picked up fresh demand into Europe, touching a recovery high of $1.3432 before momentum faded and it sank back to $1.3408, with demand in the area between $1.3410/00 able to cushion. Recovery efforts remained capped below the overnight high, the rate getting a late morning shove toward $1.3400 as traders react to Portugal FinMin comments that a Q4 dip will have impact on 2013 growth. Bids remain into $1.3400, a break to expose stronger support at $1.3385/80.
GBP – Closed in NY Tuesday at $1.5426 after rate had been pressed to extended 7-mth lows of $1.5415, with euro-sterling, seen as the main driving force on general demand for the euro, driving back up from lows at stg0.8601 to stg0.8685. Cable marked overnight lows at $1.5420 before clawing up to $1.5452 as rate trailed euro-dollar’s extended rally, euro-sterling able to touch stg0.8700 before backing off to stg0.8680 then edged back above stg0.8690 into Europe. Cable eased back to $1.5440 ahead of Europe. Early Europe saw cable supported above $1.5440, initially ignoring the announcement that the UK had raised stg2.34bln in the wireless spectrum auction (at the low end of expectations). However, as more traders picked up on the news so cable was pressed down to $1.5419, the cross nudging back to overnight highs at stg0.8700. Cable recovered to $1.5443, settling around $1.5440 into BOE Minutes and UK jobs data release. The 6-3 split vote for an added stg25bln in QE, King and Fisher joining Miles, dropped cable through $1.5400 then $1.5350, taking out barrier interest at these levels. Losses extended to $1.5313 with rate holding heavy ahead of NY. Euro-sterling spiked to stg0.87645, tripping barriers at stg0.8750.
JPY – Dollar-yen opened on a bid tone in early Asia, the move up gained a boost on Gotobi Day linked demand for the Tokyo fix, along with traders reacting to a BOJ Governor short list, published in the Daily Yomiuri, that had failed to mention Muto. Release of weaker than expected Japan trade data also attributed to the move. The pair extended to Y93.83 but met stiff resistance which prevented further gains. Euro-yen lifted in tandem with dollar-yen to Y125.90 but as momentum faded yen pared these early losses, dollar drifted back to Y93.14, later correcting to Y93.30, while euro-yen eased to Y124.90. Dollar-yen opened heavy in Europe and slipped 20 pips on cross supply to Y93.20, the rate found support and settled in a tight Y93.30-45 range for the remainder of the session. Euro-yen fell to Y125.08 in light European trade and like the dollar found support ahead of bids into Y125.00 settling in a tight range. Late euro-dollar sales added weight and the cross briefly dipped under Y125.00, before recovering to Y125.15 ahead of the NY open.
EasyForexNews Research Team