EUR – Euro-dollar closed in NY Wednesday at $1.3030 after it had been driven lower on reaction to ECB official comments suggesting a rate cut could be considered depending on circumstances (BBK Weidman, a known hawk). The rate dropped from around $1.3200 to NY lows of $1.3002 before recouping some lost ground into the close. Rate traded early Asia between $1.3030/40, dipping to $1.3021 on reaction to euro-yen sales. A bounce back in the cross took euro-dollar to session highs of $1.3061 before it eased to $1.3040 ahead of the European open. Market was seen remaining wary of headline reaction, noting that today’s start to the G20 meeting in Washington likely to prompt some comment. A fairly light data calendar in the Eurozone had main attention focussed on US weekly jobless claims at 1230GMT and Phila Fed at 1400GMT. Several speakers also noted in the US session as the IMF and World Bank meet alongside G20. Euro-dollar respected the Asian range in Europe, holding within $1.3031-58, trading late morning around $1.3050. Bids $1.3020-00, more into $1.2990, with main downside stops seen on break of $1.2970. Resistance $1.3060-80.
GBP – Cable closed in NY at $1.5240 after rate had been pressed lower through Wednesday, initially on reaction to release of weak UK jobs data, and then tracked euro-dollar’s stronger downside correction, the rate touching a session low of $1.5217 from earlier, pre data, highs around $1.5360. Rate traded between $1.5237/45 through the early part of Asia, dipping to $1.5233 on reaction to euro-yen sales before tracking this crosses’ recovery with rate able to step its way to highs of $1.5256 before drifting off to $1.5245 into the European open. The initial negative sterling reaction to data saw euro-sterling spike to stg0.8637 but the euro-dollar sell off overtook cable’s downside move allowing the cross to drop back to stg0.8535, closing NY around stg0.8550. Recovery extended to stg0.8562 in Asia, opening Europe stg0.8555. Cable extended its recovery to $1.5268 in early Europe, dropping to $1.5240 before edging toward $1.5260 before position adjustments took over ahead of the UK retail sales data. Rate was pressed to $1.5228, bouncing to $1.5240 before the weak data release was announced. Rate dropped to $1.5218, bounced to $1.5240 before getting pressed lower again as euro-sterling began to build on earlier gains
JPY – Dollar-yen closed in NY Wednesday at Y98.18, having recovered off a session low of Y97.21. Euro-yen recovered off a low of Y126.45, to close at Y127.80. Dollar-yen extended gains in early Asia to Y98.28, before meeting resistance at the NY recovery high. Fix supply and early equity negativity weighed back on this early move, with triggered stops through Y97.80 taking rate to lows of Y97.63 before fresh demand emerged. Rate was driven to a high of Y98.37 on Japanese bank demand, with a well received 20y JGB auction also providing support. Rate reversed off highs and dropped back towards Y98.00. Euro-yen extended gains through the fix to Y128.45, later settling around Y127.80. Dollar-yen trade was contained within a tight Y97.90-98.10 European range for the most part, before fresh demand in the crosses emerged taking the rate through resistance to highs of Y98.30. The Asian high seen capping the topside at Y98.37, strong offers behind into Y98.50 with stops set. Euro-yen like the dollar traded sideways, before a clean break of Y128.00 provided added momentum taking the rate to Y128.35.
EasyForexNews Research Team