EUR – Closed in NY at $1.3284 after rate had been shoved to a session low of $1.3271 ($1.3270 61.8% of the 2013 range $1.2998-1.3711) following ‘hawkish’ FOMC Minutes, though the recent euro positivity had been given a knock earlier as traders adjusted positions ahead of end of the week event risk, Italian elections, LTRO2 paybacks, release of EZ PMI’s and Germany Ifo and ongoing Cyprus concerns. Rate traded early Asia within a $1.3270/90 range before traders targeted stops through $1.3270/60. Rate extended lows to $1.3256 before a slight reprieve as rate edged to $1.3267 before a second wave of selling took rate to extended lows of $1.3236 ahead of the European open. Recovery extended to $1.3276 into early Europe but this move was quickly reversed as France flash PMI data disappointed. German PMI data added to this negativity with rate dropping to $1.3213, as stops through $1.3230 and $1.3220. Rate recovered to $1.3219 before Eurozone PMI data added further weight that took rate through $1.3200 to a low of $1.3177, this despite reports of Asian sovereign buys into the dip. Recovery efforts met resistance around $1.3200, with talk of decent sized expiries with this strike for Friday maturity suggested providing an anchor.
GBP – Closed in NY Wednesday at $1.5232, the rate’s corrective pullback having been given added weight as BOE Minutes QE vote showed a 6-3 split with Governor King and Fisher joining Miles in calling for an added stg25bln, which took it to eventual lows of $1.5192. Cable consolidated this fall in early Asia with trade contained within a range of $1.5225/40 before fresh dollar demand saw rate track euro-dollar lower to retest the $1.5200 level. The eventual break dropped rate to $1.5132, the thin Asian conditions acting like a vacuum, with demand emerging at the lows. Euro-sterling, which had seen extended highs of stg0.8764 Wednesday, was confined to a stg0.8710/59 range, trading around stg0.8735 into Europe. Euro slippage in early Europe, given added weight by release of disappointing Eurozone flash PMI data, weighed on the euro and took the cross back below stg0.8700, the move triggering stops that eased rate to extended pullback lows of stg0.8655. This move provided cable with some buoyancy, offsetting any negativity from the euro-dollar move, and allowed for a recovery off overnight lows to extend to $1.5237. Sterling was holding off best levels in late morning trade, spec longs trimming back ahead of NY.
JPY – Dollar-yen closed NY at Y93.55, after drifting off from a FOMC Minutes inspired spike high of Y94.05. Minutes were viewed as ‘hawkish’ which in turn provided a strong boost for the dollar. However, the euro saw the brunt of this dollar demand, with euro-yen dragged off its highs of Y125.55 to Y124.18 before closing in NY at Y124.28. Dollar-yen picked up fresh demand in Asia, the rate pushed up to Y93.87, with euro-yen tracking the move to Y124.71. Fresh pressure on euro-dollar reversed the early recovery in the cross, taking it down to Y123.64, dollar-yen eased to Y93.35. The yen pairs opened flat in Europe before heading sharply lower on release of soft flash PMI data across the eurozone. Middle-Eastern supply and euro-dollar’s clean break of $1.3200 all added weight, euro-yen slipped to Y123.10, dollar-yen to Y93.22. Fresh sales from Japanese exporters pressed the cross under Y123.00, flushing stops to Y122.92, dollar-yen tracked the move to Y93.19 and sits heavy ahead of the NY open.
EasyForexNews Research Team