EUR: Opened early Europe at $1.2975, equities opened sharply lower in early Asian trade and euro-dollar slipped to $1.2972. Dip demand recovered to $1.2992 as the dollar softened across the board, before the pair met resistance ahead of $1.3000, later easing to $1.2985. Euro-dollar squeezed higher in early Europe to $1.2996, where the rate stalled and eased back to opening levels as traders awaited the flurry of eurozone data. The pair dropped sharply on release of weaker than expected German flash mfg PMI to $1.2965. A soft German IFO Business Climate reading added weight, CTA stops were flushed through $1.2945 and as risk aversion took hold of markets the rate printed lows of $1.2922. Reported Asian demand briefly lifted but recovery attempts seen shallow, rate last deals $1.2936 ahead of NY. Traders look to the Fed’s first post-QE3 meeting at 1915BST and with no press conference by Bernanke scheduled, focus turns to the statement, although no significant changes are expected.
GBP: Opened early Europe at $1.5953 and stg0.8138, GBP opened flat in Asia and steadied following comments from the Governor of the Bank of England that warned the UK economy will not recover until banks own up up to their bad debts, adding that he is ready to inject more stimuli if needed. Cable slipped to lows of $1.5936, before the rate recovered to $1.5945. Sharp falls in Asian equities added weight to euro-sterling and the cross ground to lows of stg0.8134. Dip demand bounced and the euro-dollar extended recovery helped lift to stg0.8148, later easing on profit take sales. Cable opened European trade on a bid tone and spiked to highs of $1.6000 on reported demand from a UK bank, before strong resistance and profit take sales eased. The rate extended losses on sharp euro-dollar slippage following release of weak eurozone data and ground lower to $1.5950, later bouncing to $1.5975. Euro-sterling tracked euro-dollar moves and made a show under stg0.8100 to print lows of stg0.8090, the rate sits heavy ahead of NY.
JPY: Opened in early Europe at Y79.82 and Y103.57, Dollar-yen ground lower in early Asian trade as the dollar softened against most major currencies, dip demand ahead of the Tokyo fix pared losses and the rate climbed back to Y79.92. The rate later eased to Y79.85 as strong Japanese corporate/exporter offers continue to cap ahead of Y80.00. Euro-yen slipped to Y103.53 in early Asia, before lifting in tandem with euro-dollar’s extended recovery to Y103.82, later settling around Y103.60. Dollar-yen opened flat in Europe with trade tied to a narrow range, before grinding lower with euro-yen on weak eurozone data. The rate slipped to Y79.66 where the rate met tech support and lifted back to Y79.78 ahead of NY. Euro-yen squeezed higher on the open but any gains were soon erased on release of weak German flash mfg PMI data. The cross extended losses on a soft IFO Business Climate reading and flushed CTA stops on the move to print lows of Y102.98. Dip demand recovered to Y103.20, however the underlying tone remains heavy ahead of NY.
EasyForexNews Research Team