GBP: Opened early Europe at $1.6008, stg0.7977, GBP closed in NY at $1.5989 after rate had seen an impressive bounce off $1.5960 lows to $1.6018, the rate then pulling back to $1.5985 into the close. Rate was squeezed to $1.5982 (61.8% $1.5960-1.6018) in early Asia before edging to an initial high at $1.5999. Positive react in euro-dollar to euro/ECB support comments from IMF Zhu saw cable track this rate higher, moved up to retest the $1.6018 level. Rate then settled between $1.6005/15, easing to $1.6003 into early Europe. Rate challenged support at $1.6000 before turning higher in early Europe, the rate trailing euro-dollar’s stronger recovery, which in turn allowed euro-sterling to edge up to stg0.7999, from its Asian range of stg0.7974-0.79865. Cable touched an initial high of $1.6028 before easing to $1.6017 into UK trade data release. A sharper narrowing in the trade deficit, from poor June numbers, allowed cable to extend highs to $1.6032 but failed to move through Friday’s post NFP high of $1.6034. However, another set of decent UK data kept the pound buoyed.
EUR: Opened early Europe at $1.2770, Euro-dollar closed in NY at $1.2757 after correcting back from a high at $1.2804 to $1.2755. Rate dipped to retest $1.2755 into early Asia before slowly edging higher. Move up gained an added boost on reported comments from the IMF’s Zhu that he strongly supports the ECB bond buying programme. Rate spiked to $1.2794, squeezing out minor stops along the way, but move met decent US name sell interest that capped, then reversed the rate lower. Euro-dollar eased to $1.2770, getting an added squeeze down to $1.2759 into early Europe as the mentioned US seller moved lower. Recovery off lows was boosted as the German Constitutional Court said ESM verdict would be given Wednesday, as planned. Rate pushed above $1.2800, helped by Finland PM comments that all parties in Finland wanted to stay in the euro. Rate extended to $1.2819 before it met Dutch PB supply ahead of $1.2820. Rate dropped below $1.2800, triggered stops extending move to $1.2786 but buyers continued to emerge into dips. Rate was holding back around $1.2800 in late morning trade.
JPY: Opened in early Europe around Y78.22 and Y99.89, another lackluster day for the yen in Asian trade Tuesday, as the market was seen settling in ahead of the Fed policy announcement Thursday. Dollar-yen was again tied to a narrow trading range, unable to break out of a Y78.18/28 range. Euro-yen in Asia was contained by Y99.815-100.032, the rate supported for general euro demand, while countered by the underlying heavy tone in dollar-yen. This heavy tone seen from stale longs taken in the Y78.80/00 area. Dollar-yen remained within its Asian range through the early part of the european morning, though was favouring the base. Euro-dollar recovery allowed euro-yen to edge up to Y100.24, though move was not seen with any great enthusiasm. Heavy selling in dollar-yen late morning saw the cross drop back below Y100.00, as dollar-yen broke under post NFP lows at Y78.016 to Y77.96. A major German name and Asian interest was seen behind sales but macro demand cushioned the move. Option barrier at Y77.90 seen as the nearby interest, with large stops reported sub Y77.65 also in view.
EasyForexNews Research Team