EUR – Closed in NY Friday at $1.3022, having been pressed to session lows of $1.2966 before recovering to $1.3042, then drifting off into the close. A fairly subdued session for euro-dollar through Asia with trade contained within a relatively tight range of $1.3002/31, trading around $1.3006 into Europe. Italian Beppe Grillo’s comment over the weekend about the country leaving the euro had little effect on trade, he had said similar in his election campaign. Euro-yen demand provided the lift to the overnight highs but traders noted supply sitting above $1.3030 preventing further upside progress. Rate came under pressure into early Europe, the break below $1.3000 triggering stops which took rate to $1.2987. Corporate demand off the early low allowed the rate to edge bacvk up to $1.3019, but move met Asian supply which capped and allowed rate to drift back to $1.3010. Release of much weaker than forecast EZ Sentix investor data provided the trigger for another sell off, the rate breaking $1.3000 thejn $1.2987 to extend intraday lows to $1.2982. Recovery efforts remained below $1.3000 into late morning trade.
GBP – Closed in NY at $1.5038 after rate had managed to recover off session lows of $1.4985 to $1.5044 before drifting off into the close. Sterling was seen under pressure Friday following the release of weak manufacturing PMI data. This turns attention on to services PMI data Tuesday, a weak reading expected to put market on a QE extension footing. BOE rate decision due this week (Thursday), but despite the recent 6-3 split at the last meeting to keep QE unchanged, most expect rates and QE to again hold steady (despite BOE King’s stg25bln extension vote last meeting). Trade through Asia was confined to a tight $1.5024/47 range, trading around $1.5034 into Europe. Rate tracked the early downside pressure on euro-dollar, the rate easing to $1.5018 before picking up fresh demand. The rate picked up momentum and took it through $1.5050, the level having capped recovery efforts in NY and Asia, before momentum faded at $1.5060. Rate settled around $1.5050 into construction PMI, the weak release dropping cable to $1.5024 before second wave sales extended move to $1.5000. Sterling remained wanted in dips, cable recovering to $1.5040 late morning. Sterling gains versus the euro seen providing the main buoyancy for the pound.
JPY – Dollar-yen saw a late upside drive in NY Friday, pushing to Y93.68 from day lows of Y92.44, before it drifted to Y93.59 into the close. Rate nudged up to Y93.70 in early Asian trade on Kuroda comments (suggested size and type of assets the BOJ now buys not enough to achieve its 2.0% inflation target, though noted buying foreign bonds would be difficult). Nothing particularly new in Kuroda’s comments though was seen as him accepting the nomination for BOJ Governor. Corporate supply greeted the early rally, and with the Nikkei reversing early gains, saw rate ease to Y93.29. Rate settled between Y93.30/50 into Europe. Euro-yen closed NY at Y121.87 after easing off late rally highs of Y122.17. Early volatility into Asian trade, with rate dropping to Y121.43 before recovering to Y121.99 into the fix. Decent offers said to reside at Y122.00, with sell interest here able to reverse this early move, taking it back to Y121.38. Rate recovered to Y121.80 before heading lower again into Europe on general euro sales, the rate easing to Y121.26. Yen pared late Asian gains into Europe, dollar-yen edging to Y93.69 before settling between Y93.50/60, euro-yen to Y121.92, settling back around Y121.60 in another wise lacklustre session.
EasyForexNews Research Team