EUR – Closed in NY at $1.2873 after rate had been shoved to lows of $1.2844 following the Cypriot Parliament rejection of the Troika bank deposit levy, the move taking out barrier interest at $1.2850, with it then recovering to $1.2923 on ECB comments that they would continue to provide funding for Cyprus, then drifted back below $1.29 into the close. Rate continued to ease into early Asia, touching a low at $1.2857 before recovering to $1.2880 and settling between $1.2870/80 into Europe. Rate extended recovery to $1.2910 into early Europe, dipped to $1.2892 before edging higher again to $1.2916. Recovery faltered and eased back toward $1.2900 on cable slippage, with reported middle eastern sales providing the added weight to take rate below $1.2900 and on to $1.2880. Rate met decent demand into the dip and edged back toward $1.2900, lifting above as cable bounced following release of BOE MPC Minutes. Rate edged above Tuesday’s NY recovery high at $1.2923 to $1.2925, dipped to $1.2913 before extending move to $1.2936 late morning. Cyprus headlines have quietened down but market wary of that headline risk which has been driving markets this week.
GBP – Closed in NY at $1.5100 after NY trade was contained within a range of $1.5078-1.5144 leaving euro-sterling to track euro-dollar slippage, the rate extending its recent corrective pullback to stg0.8506 before it closed around stg0.8520. Cable eased to early lows of $1.5086 in Asia before fresh demand emerged to take it to session highs of $1.5107. Rate reversed tack to $1.5080 through the Asian afternoon before recovering above $1.5090 ahead of Europe. The cross touched stg0.8519 before it recovered to stg0.85375 through the balance of the session. Early Europe dollar sales lifted cable to $1.5112 before stronger sellers emerged. The move back below $1.5100 was driven by UK clearer and US investment house sales, with middle eastern supply also mentioned as rate
dropped through $1.5080/70, breaking Monday’s low at $1.5060 to take it to a low of $1.5027. Move saw the cross push higher, though resistance at stg0.8575/85 (high stg0.85805) provided buoyancy for cable. Sterling losses prompted suggestion that MPC may have tightened to a 5-4 vote on QE, but the 6-3 result spiked sterling higher, cable to $1.5158, the cross to stg0.8520. Sterling off best levels with the UK Budget looming on the horizon at 1230GMT.
JPY – Dollar-yen lifted to Y95.20 in Asia before it was knocked back to Y94.83. Traders noted an Asian real money player has been an interested buyer into dips in this area for the past few sessions, possibly related to the reported large European Y95.20 digital that is due to roll off at today’s NY cut. Traders also note that a large plain vanilla with this strike also rolls off at the same time. Rate recovered through the balance of the Session to Y95.18. Euro-yen eased to Y122.04 in early trade before recovering to Y122.65. Risk appetite increased around the European open as euro-yen extended late Asian gains to Y123.25, Middle-Eastern supply stalled and the rate pared light gains back through Y123.00, with dollar yen tracking the move. Support in the dip aided recovery efforts, before grinding higher on cable demand to Y123.20 in reaction to the 6-3 split against QE extension. A Directional buyer in late trade gave a further boost to session highs of Y123.40
as the pair consolidated gains ahead of NY. Dollar-yen was tied to a narrow range and it too held gains, last trading around Y95.40.
EasyForexNews Research Team