EUR – Closed in NY Wednesday at $1.3014, having recovered off Ifo react lows of $1.2955 to $1.3034, with NY respecting those parameters as it recovered off the late session lows of $1.2974 to $1.3029 into the close. Early trade in Asia was contained within a tight $1.3010/20 range before buyers emerged, triggered stops through $1.3040 then $1.3050 taking it on to $1.3062. Pressure on the dollar was seen prompted in part by the low China yuan fix. Rate drifted off highs, trading around $1.3040 ahead of the European open. Rate edged to $1.3056 in opening Europe trade before getting pressed down to $1.3027 on euro-yen sales. Rate recovered off lows, upside getting a boost on the back of cable’s positive react to strong Q1 GDP data, as well as Germany Merkel comments that for Germany higher interest rates would be better. Demand was able to clear middle eastern offers above $1.3060, with follow through buying triggered on the break of $1.3070. Rate touched a high of $1.3077, as reported offers placed toward $1.3100 made upside progress sticky. Rate was holding above its Asian high in late European morning trade. Offers seen at $1.3080/85 ahead of $1.3100.
GBP – Closed in NY Wednesday at $1.5268, the rate having enjoyed an underlying buoyant tone through the day with some linking this to UK dividend demand (more expected over the next few sessions). Despite this buoyancy rate failed to break above recent highs at $1.5288, though the underlying positive tone was supported by the higher lows seen through the day. Rate marked Asian lows in opening trade at $1.5265 before fresh buyers emerged, the rate breaking $1.5288, before topping out at $1.5335. Press reports suggesting US Verizon has hired advisors to look at buying UK Vodafone’s 45% stake in Verizon Wireless for $100bln also provided cable additional lift. Rate drifted off highs ahead of the European open as short term traders pared longs with market turning main attention to the release of UK Q1 GDP data. Position adjustments continued to weigh on sterling, cable easing to $1.5282, while euro-sterling picked up demand that edged it to stg0.8533 into release. Strong data spiked cable to an initial high of $1.5400, while the cross dropped back to stg0.84535 as those long positions were flushed out. Second wave cable buys extended rally to $1.5448 but middle eastern sellers ahead of $1.5450 countered.
JPY – Closed in NY at Y99.53 after recovering off NY session lows of Y99.24 to Y99.60, easing back into the close. Rate nudged up to post overnight highs at Y99.56 in opening trade before reversing, the initial move lower meeting support at Y99.40. The dollar extended losses before finding support at Y99.25, the move influenced in part by the low China yuan fix which prompted dollar sales vs Asian currencies across the board. Euro-yen saw sharp gains to Y129.91, later easing to Y129.40. Dollar-yen opened on the defensive in early Europe, Japanese bank supply flushed stops through Y99.20 on the move to lows of Y99.00, before real money demand in the dip cushioned, extending the recovery to Y99.30. Second wave sales pressed to Y99.05, before sentiment turned on release of much stronger than expected UK GDP data which supported the euro, dragging the dollar to an eventual high of Y99.35. Euro-yen printed lows of Y129.05 in early Europe before sharp gains with euro-dollar lifted to Y129.86, flushing light stops on the move. Profit take sales in the yen pairs later eased to Y129.60/Y99.20 ahead of NY.
EasyForexNews Research Team