EUR: Opened early Europe at $1.3070, Euro-dollar closed in NY at $1.3047 as rate recovered off session lows of $1.3029. A paring back of risk positions Tuesday saw rate extend its corrective pullback off Monday highs at $1.31729 to $1.3029. A quiet open to Asia saw rate consolidate between $1.3040/50 before Japanese sales of euro-yen into the Tokyo fix pressured it to session lows of $1.3034. Slow initial recovery to $1.3045 then accelerated as the BOJ announced further easing. Euro-yen spiked to Y103.53, from lows of Y102.48, taking euro-dollar to session highs of $1.3072. Rally met heavy offers at $1.3073 but continued demand managed to edge rate on to $1.3085 before stronger real money supply hit the market. Rate eased to $1.3057 before fresh demand emerged with rate nudging back to $1.3076. Rate again met headwind supply, the pullback this time gathered downside momentum as market got whiff of a negative German bank economists report. Rate dropped to $1.3024 as report was indeed downbeat on Germany growth forecasts. Recovery efforts remains shallow ahead of NY.
GBP: Opened early Europe at $1.6252, stg0.8042, GBP closed in NY at $1.6244 after rate had pulled back from session highs of $1.6267 to $1.6237 ahead of the close. Initial sales into Asia saw rate retest that late NY pullback before it recovered, meeting initial resistance around the $1.6245 level. Yen demand into the Tokyo fix caught market wrong footed and squeezed out a few yen shorts, the move taking cable to lows at $1.6233. Rate recovered, the move up gathering momentum as the BOJ announced further easing measures. Strong sales of yen allowed cable, via sterling-yen, to push up to $1.6255, with rate holding firm into early Europe. Rate attracted further demand into Europe which took it to extended recovery highs of $1.6271 before position adjustment ahead of BOE Minutes release saw it drift back to $1.6257. Minutes provided no negative surprises, the initial react taking rate to $1.6269 before sellers emerged to counter. Rate squeezed lower, tracking euro-dollar slippage, retested earlier lows at $1.6233 but euro-sterling easing to stg0.8020 diverted some of the pressure.
JPY: Opened in early Europe around Y79.16 and Y103.46, early demand for dollar-yen and euro-yen into Asian trade, as traders positioned ahead of the BOJ announcement, were caught wrong footed as early Japanese sold euro-yen ahead of the Tokyo fix. Dollar-yen dipped to lows of Y78.56, euro-yen to Y102.47. Recovery was given an added boost as the BOJ announced a larger than forecast easing programme which prompted strong yen sales, the action taking dollar-yen to Y79.18, euro-yen to Y103.55 ahead of the European open. Traders noted that large offers appeared above Y79.20 on the platforms, with follow demand in dollar-yen taking it to Y79.21 before it reversed. Euro-yen touched Y103.63 before meeting heavy real money supply that dropped it back below Y103.00. The move in the cross weighed back on dollar-yen, with real money supply taking this rate back below Y79.00. Euro-yen found support at Y102.80 late morning, though recovery efforts remained laboured. Dollar-yen remained off key Y79.26-33 levels (cloud top/200-dma), a close above seen needed to support further gains.
EasyForexNews Research Team