EUR – Closed in NY at $1.3063, after rate had seen lows of $1.3037, with moves through Fed Bernanke’s testimony mainly driven by euro-yen reaction. The recovery extended to $1.3070 into Asia only to get pressed down to $1.3042 post Tokyo fix as euro-yen sellers emerged. Fresh demand cushioned the base and allowed rate to recover through the early high, pushing on to an overnight high of $1.3074. Momentum faded on approach to $1.3080, the rate then drifting to $1.3052 but bounced back to $1.3080 into Europe as Asian traders reacted to Italian press reports suggesting Grillo had softened his stance and was looking at coalition prospects. The recovery extended to challenge reported offers in the area between $1.3090/95, getting rejected a few times before lifting through $1.3100, the move aided by the release of stronger than forecast EZ economic confidence data, with reports that the Italian bond auction was going well. Rate touched a high of $1.3122 before getting repulsed, Asian sovereign supply between $1.3120/30 countered and took rate to $1.3077. Buyers quickly emerged into the dip, bouncing rate back to $1.3100 late morning. Suggestion those that went short above $1.3120 will look to take back $1.3045/40.
GBP – Closed in NY Tuesday at $1.5126, after pulling back from a late recovery high of $1.5156 seen after it had corrected off session lows of $1.5112. Rate tracked euro-dollar higher into early Asia, posting highs of $1.5137 before turning lower post Tokyo fix, meeting demand ahead of $1.5100 which cushioned through the early part of the Asian afternoon. Fresh selling emerged ahead of Europe, the supply triggering stops sub $1.5100 that took it to lows of $1.5080, but demand between $1.5080/70 supported, though recovery efforts held below $1.5100 ahead of Europe. Euro- sterling extended its recovery off recent lows of stg0.8576, the move up reportedly driven by end month demand. This recovery extended in Asia, pushing to stg0.8660/65 ahead of Europe. Cable bounced off lows, the recovery pushing to $1.5139 on a mix of reaction to a report that Vodafone possibly putting plans on hold for Germany Kabel, as well as spec plays ahead of UK release of GDP data. Headline number came in unchanged but positive revisions in Q1 and Q3 took rate to $1.5145 but sellers were quick to sell back. Rate dropped to $1.5101 before it drove up to $1.5165, as it tracked euro-dollar’s extended recovery, settling back around $1.5130 ahead of NY.
JPY – A whippy session for euro-yen through Fed Bernanke’s testimony Tuesday, the rate dropped from initial react highs of Y121.05 to Y118.98 before recovering into the close at Y120.18. This recovery extended to Y120.53 ahead of the Tokyo fix, as Japanese importers and investors provided the main demand. Post fix and rate reversed, dropping back to Y119.52 on fast money sales, later recovering to Y120.35. Dollar-yen saw similar moves on Tuesday, rate spiked to Y92.40 before dropping back to Y91.13, later recovering to Y92.10. This recovery extended to Y92.27 ahead of the Tokyo fix, before dropping back to Y91.70. The yen pairs opened flat in early Europe with trade volumes light confined to tight ranges. Euro-yen spiked to highs of Y120.20 on release of stronger than expected EU Economic Sentiment Index, extending to Y120.40 on a well received Italian auction. Risk appetite soon turned and the cross pared gains with euro-dollar to settle around Y119.95. Dollar-yen tracked the move, lifting to Y91.81, later easing to Y91.60.
EasyForexNews Research Team