GBP: Opened early Europe at $1.5823, stg0.7922, GBP closed in NY at $1.5833, after rate had seen session highs of $1.5855 before pulling back to $1.5809. Cable trade through early Asia was contained within a tight range of $1.5522/35, with moves within determined by euro-dollar as the cross was contained by stg0.7915/25. Late Asia/early Europe comments from China’s Wen that China was interested in investing in European bonds provided a general boost to risk, with the rally in euro-dollar taking cable to extended highs of $1.5842. Rate settled back around $1.5830, then decoupled from euro-dollar as the cross moved up to stg0.7936 (61.8% stg0.7955-06) which took cable to lows of $1.5815. Rejection from stg0.7936 allowed cable to recover to $1.5840 before again settling back round $1.5830 ahead of NY. End of month looming with market expecting euro-sterling demand to emerge, though this could be offset by euro supply at the fixes. Cable offers remain into $1.5860 with stops above, though a break expected to attract reserve and corporate supply. Bids $1.5815/00.
EUR: Opened early Europe at $1.2535, Euro-dollar closed in NY at $1.2530 after rate settled around this area through late afternoon trade following a late recovery rally to $1.2549. Rate had earlier been repulsed from $1.2565, trading to session lows of
$1.2518. Rate initially edged to $1.2537 in early Asia before turning lower as rate reacted to the paring back of risk, led by sales of Aussie dollar. Rate touched a low of $1.2523 before meeting bid interest, talk in Asia of decent demand back in place around $1.2520, with rate then able to recover to around $1.2540. A dip to $1.2534 was quickly reversed as the rate got a boost from comments by China’s premier Wen that China is willing to invest in European bonds which provided rate with a bid tone into Europe. Rate pushed up to $1.2561 before move faltered, meeting US corp supply, with Dutch name supply in the mix as rate eased to $1.2538. Strong Swiss name demand emerged into the dip to take rate back to earlier highs, extending to $1.2564 as the Italian bond auction went well. Rate retains a buoyant tone ahead of NY.
JPY: Opened in early Europe at Y78.63 and Y98.70, month end demand in early Asia lifted dollar-yen to Y78.75, the move however was countered by sharp aussie-yen sales printing a low of Y81.14. The pair extended losses through the Tokyo fix to Y78.65 and settled in a tight range. Weaker than expected Japanese Retail Trade had little market reaction and dollar ground to Y78.60 in late dealings. Euro-yen largely mirrored dollar moves, tied to a narrow Y98.52 – Y98.71 range. Dollar-yen endured a painful session in Europe with trade stuck in a Y78.60-66 range. Bids seen on the downside at Y78.50, stronger behind at Y78.30/25. Tech resistance at Y78.71 from the 21 dma, ahead of offers at Y78.75/80, through here and expect strong resistance from exporters for month end. The cross ground lower on the open amid light flow to Y98.61, before demand cushioned the move to settle in a tight range. The pair lifted to session highs Y98.78 on market rumours of a well received Italian auction, later settling around Y98.70 on release of full size allotment.
EasyForexNews Research Team