EUR – Closed in NY Tuesday at $1.2820 after rate had been pressed to eventual intraday lows of $1.2808 before recovering to $1.2827 ahead of the close. Early Asia took rate back to retest that $1.2827 level before turning lower again, the dollar enjoying another round of general demand (apart from vs the Australian dollar which bucked the trend on the back of strong domestic trade data and strong China non-mfg PMI) as markets traded with a slight risk off tone, tracking ex-Japan equity markets. Rate squeezed under $1.2800 to $1.2795 before slowly climbing back through the Asian afternoon to the $1.2810 area into Europe. Rate came under fresh sell pressure into Europe which pressed it back below $1.2800, extending lows to $1.2790. With little to trigger further selling the short term community were seen sitting short and open to a squeeze which eventually came as rate edged back above $1.2800 and on to $1.2818. IMF announcing E1bln aid for Cyprus bailout prompted another round of buying that spiked rate to $1.2838, aided by euro-yen breaking above Y120.00. Euro-dollar eased off highs but found support ahead of $1.2820.
GBP – Closed NY Tuesday at $1.5104 after the rate had been under pressure through the NY session, breaking support in the $1.5170/80 area before posting lows at $1.5099. Rate consolidated Tuesday’s losses between $1.5104/10 through the Asian morning before it came under another round of selling which extended lows to $1.5075 before settling between $1.5077/87 ahead of the European open. Euro-sterling, which had eventually broken resistance at stg0.8475/85 Tuesday posted highs in NY at stg0.8494, with rate consolidating this recovery between stg0.84835-0.8492, leaving cable to track euro-dollar moves. Cable touched $1.5089 before retesting the overnight low in opening European trade, with buyers then emerging to edge rate backa bove $1.5100. Market chatter suggesting UK construction PMI data would come in stronger then forecasts edged rate on to $1.5118, settling back at $1.5112 into release. Headline number showed an improvement from Feb. but like manufacturing PMI, which had seen similar rumors Tuesday, failed to post above median expectations. This dropped cable to $1.5088, as the short term community rushed to cover longs before rate recovered to $1.5118, holding above $1.5100 late morning.
JPY – Dollar-yen turned lower in early Asia to Y93.32, before support from corporates pared losses, a strong open for the Nikkei and demand through the Tokyo fix extended gains to Y93.69. Euro-yen moved up in tandem but met stiff resistance on approach to Y120.00, with macro and momentum funds the stand out sellers. The rate later settled around Y119.75 with dollar-yen at Y93.50. The two day BOJ meeting began today with Thursday’s announcement providing anticipation for strong action based on new BOJ Kuroda’s determination to do ‘whatever is necessary’ to eradicate deflation, committing to reach 2.0% inflation within 2-years. Dollar-yen headed lower in early Europe on supply from exporters, euro-dollar’s break of $1.2800 added further weight to Y93.34, before support in the dip cushioned. Euro-yen slipped to Y119.46 before a turn in sentiment extended recovery efforts to Y119.70. Momentum continued through Y120.00, flushing stops on the move to Y120.18, before tech resistance from the 100-hour ma pared light gains. Dollar-yen tracked the move to Y93.66, later easing to Y93.60.
EasyForexNews Research Team