EUR: Opened early Europe at $1.2880, Euro-dollar closed in NY at $1.2873 after recovering through the session from a low of $1.2835 into a late high of $1.2875. A late recovery attempt on Wall St provided tentative risk appetite into early Asia, and with Asian equity markets opening positive prompted short covering that lifted rate to an extended high of $1.2878. A drop to $1.2867 bounced as Japanese trust banks bought yen crosses (euro-yen and Aussie-yen) which took euro-dollar to session highs of $1.2892. Rate extended this move into Europe, as market reacted to rumours that China was to announce new IPO policies which boosted Shanghai A shares, taking rate to highs of $1.2901. The corrective pullback picked up momentum as wires reported China regulator press briefing was not about IPO reform. Rate met support at $1.2880 but a continued paring of longs positions squeezed rate through $1.2875/65, the break under $1.2860 (61.8% $1.2835-1.2901) accelerated move to $1.2849. Rate was holding heavy ahead of the NY open, with focus on the Spanish 2013 Budget (1200GMT).
GBP: Opened early Europe at $1.6187 and stg0.7957, GBP closed in NY at $1.6162 after recovering off session lows at $1.6137 to $1.6167 ahead of the close. Rate dipped to $1.6160 in early Asia before picking up fresh demand as session opened with tentative risk appetite, prompted by the positive opening in Asian equities. Rate stepped its way to a high of $1.6194 before momentum faltered and allowed for a drift to $1.6177. Fresh demand emerged into the dip ahead of the European open, taking rate to $1.6205 as early market picked up risk related demand on rumours China to change IPO policies. Wire report quelling this talk countered the move and allowed rate to ease to $1.6187. Recovery to $1.6202 proved short lived as traders began to pare back longs ahead of UK GDP release. Rate touched a low of $1.6166, edged back to $1.6174 into release. A slight improvement in the final Q2 reading saw rate recover to $1.6200, before heavy selling of euro-sterling, suggested linked to Friday’s EU CAP payment fix, took the cross to extended lows of stg0.7923, lifting cable to $1.6220.
JPY: Opened in early Europe at Y77.73 and Y100.22, Dollar-yen opened in Asia at Y77.70 and ground lower ahead of the Tokyo fix to Y77.63. Trade continued flat in a tight range before late demand in Asian equities lifted to Y77.75. Euro-yen largely tracked the dollar and slipped to Y99.91 around the fix before Japanese trust bank demand lifted to Y100.15, extending to Y100.27 on the close. Dollar-yen was stuck in a narrow Y77.66-73 range in European trade this morning with very little action to excite the pair. Key support remains at Y77.50 on the downside where barrier and semi-official interest are reported. Euro-yen opened at the top of the range and eased lower with euro-dollar to Y100.02, before dip demand led the recovery. A fresh wave of supply pared gains and the cross dipped under Y100.00, extending losses to Y99.81 and sit heavy ahead of NY. Support seen on the downside at Y99.80, stronger behind at Y99.50 with stops set on a break.
EasyForexNews Research Team