EUR – Opened early Europe at $1.2956, Euro-dollar closed in NY at $1.2943 after extending its recovery off the week’s opening lows around $1.2880 through the day to a high of $1.2947. The dollar retained its underlying soft tone through Asia, with Wednesday’s FOMC and Thursday’s BOJ policy decisions in focus, with euro-dollar able to mark overnight lows at $1.2929 before picking up demand that took it on to $1.2962 after stops through $1.2950/55 were triggered. A dip to $1.2946 attracted another round of buying with rate retesting overnight highs into Europe. However, this early rally met stiff resistance from reserve names with the rate pulling back to $1.2940 before meeting strong demand. An Asian sovereign was linked to the bid, said to be recycling intervention dollars, with European corporate buys adding to the buoyancy here. Rate recovered, picking up the momentum to break $1.2960/65 on release of strong ZEW data which took it to $1.2976. Strong offers greeted the move, with talk of a heavy offer behind at $1.2980. Rate remained firm but off highs into New York.
GBP – Opened early Europe at $1.6086 and stg0.8054, GBP closed in NY at $1.6077, after rate had seen an impressive recovery rally to $1.6096 through the NY session before it eased off to $1.6064, recovering into the close. The recovery extended to $1.6085 into early Asia before drifting off to session lows of $1.6069. Fresh demand through the Asian afternoon lifted rate back through its early high and on to $1.6087 ahead of the European open, with rate holding firm. Moves through Asia were seen mainly influenced by euro-dollar as the cross was held within a range of stg0.8045/56. Cable extended highs to $1.6088 into Europe before easing back to $1.6070 as it again took direction from euro-dollar, but fresh demand emerged to take advantage of the dip and take rate up to $1.6090. Release of strong Germany ZEW data boosted the euro, and while cable struggled to build above $1.6080, allowed the cross to edge up to stg0.8070 by late morning. Strong offers have been noted in the cross between stg0.8075/85. Cable remains firm but upside momentum appears to be fading, traders say.
JPY – Opened in early Europe at Y82.38 and Y106.69, Dollar-yen lifted to Y82.44 in early Asian trade as flows remained light, post fix sales pared gains and the rate settled in a tight Y82.31-44 range. Euro-yen lifted with the dollar to Y106.73, before easing to Y106.48. Rate later bounced and tracked euro-dollar’s extended recovery to Y106.75, as the euro retained a general firm tone amid a muted session with FOMC and Dec 16 elections keeping many players sidelined. Markets continued light into Europe and dollar-yen ground to lows of Y82.31, the cross easing to Y106.55. Dip demand led recovery attempts and aided by euro-dollar pared early losses. Risk appetite increased throughout the session, a well received Spanish auction, followed by better than expected German ZEW data boosted markets. Dollar lifted to Y82.55, euro-yen Y107.08 where the underlying tone remains buoyant ahead of the NY open.
EasyForexNews Research Team