EUR – Opened early Europe at $1.2951 Euro-dollar closed in NY at $1.2955 after rate had recovered off session lows at $1.2880 as risk gained a boost on the back of comments from US Pres.Obama and House Speaker Boehner which were seen showing a compromise possible concerning the looming Fiscal Cliff. An optimistic Beige Book also helped. Rate extended recovery to $1.2962 into early Asia before momentum faded and allowed it to correct back to $1.2941. Rate retained an underlying firm tone, despite Moody’s comment that the recent Greek debt deal doesn’t resolve sustainability. Fresh buyers emerged to take rate back up to $1.2960 before it settled between $1.2950/60 through the Asian afternoon. Early sales into Europe squeezed rate to $1.2939 before stronger demand emerged. This buy interest edged rate to an extended high of $1.2991, after tripping stops through $1.2965-80, though move met headwind supply from some major reserve names. Strong US name demand provided the main upside pressure with rate challenging resistance between $1.2990/1.3000 ahead of NY.
GBP – Opened early Europe at $1.6016 and stg0.8085, GBP closed in NY at $1.6016 after recovering with euro-dollar from lows of $1.5962. Risk gained a late boost in NY from perceived positive signals concerning a compromise on the US Fiscal Cliff, as well as an upbeat Beige Book. Cable touched $1.6020 (61.8% $1.6056-1.5962) into early Asia before drifting off to $1.6010. Fresh demand emerged to allow rate to retest the early high before it settled around $1.6015 into Europe. Euro-sterling was contained by stg0.80815-0.8091 through Asia. Cable was pressed lower into early Europe, extending its base to $1.6002 after the release of weaker than forecast Nationwide house price data. However, fresh demand emerged into the dip with rate then trailing euro-dollar’s stronger recovery, allowing euro-sterling to break higher, moving above stg0.81 to stg0.81115. The move in the cross prompted talk of European sovereign end month buys though this was not confirmed. Mix views on sterling, talk of large RHS interest in the cross for Friday, but sterling positive M&A seen in the pipeline.
JPY – Opened in early Europe at Y82.13 and Y106.28, Dollar-yen opened on a bid tone in Asia and lifted to highs of Y80.22 on reaction to headlines from LDP leader Abe that reiterated his stance on BOJ unlimited easing until inflation hits 2%. Euro-yen tracked this move, having corrected off pullback lows on Wednesday of Y105.28 to Y106.45. Tight range trade continued before a fresh wave of demand extended to Y106.51, resistance from Japanese names capped the move and eased to Y106.35. Late trade saw the dollar settle around Y82.15 into Europe. Dollar-yen remained in consolidation mode tied to a narrow Y82.09-20 European session range. Bids reported on the downside at Y82.00, more behind at Y81.80. Tech resistance at Y82.26 (50% of Y82.24-81.69), seen capping moves on the topside. Risk appetite increased and euro-yen ground slowly to highs of Y106.72, before the rate stalled and slipped to Y106.55 on reported Asian sovereign supply. Late trade saw the cross bounce to Y106.68 and head into New York on a buoyant tone.
EasyForexNews Research Team