EUR – Closed in NY Thursday at $1.3240 after experiencing a sharp pullback to $1.3202 from an intraday high of $1.3284 as rate reacted to negative Fiscal Cliff comments. Rate corrected to $1.3249 ahead of the close as House Speaker Boehner called on House Republicans to reconvene Sunday, boosting hopes for a compromise. Rate eased to $1.3231 in opening Asian trade before Tokyo began buying euro-yen. The rally in this rate lifted euro-dollar to $1.3253 (61.8% $1.3284-02) before momentum faded and it then drifted off to $1.3237 before settling between $1.3238/48 through the Asian afternoon and into Europe. Early demand in Europe saw rate target stops above the Asian high, the added demand taking the rate on to $1.3257 before momentum faded and it settled for a short while around $1.3250. A paring of long euro-yen positions by Asian accounts ahead of the weekend, and Japanese holidays next week, led to a sharp corrective pullback, the move breaking $1.3200 before basing at $1.3179. Rate was holding off lows ahead of New York but market seen of further Fiscal Cliff fallout.
GBP – Closed in NY at $1.6110 having seen a sharp corrective pullback from $1.6203 to $1.6067 in this session as markets reacted to negative Fiscal Cliff comments. Rate recovered to $1.6118 ahead of the close as House Speaker called Republican members to reconvene Sunday which boosted hopes that a compromise could be reached. Cable marked lows into Asia at $1.6099 before recovering to $1.6122 as it tracked euro-dollar’s stronger recovery. The volatility in cable, caused by the thin conditions, saw euro-sterling spike to stg0.82245 in NY, with early trade in Asia consolidating this move between stg0.8217/23. Sales through the Asian afternoon squeezed the cross to stg0.82135 ahead of Europe. Cable nudged to $1.6128 in early Europe, though move lagged euro-dollar’s stronger recovery, which in turn took euro-sterling up to stg0.8225. The corrective pullback in euro-yen weighed on euro-dollar, the pullback outpacing cable which took the cross down to stg0.8185. Cable eased below $1.6100, finding support around $1.6080. Fiscal Cliff concerns continue to make traders wary to over exposure to risk.
JPY – Negative comments on the Fiscal Cliff negotiations Thursday acted to drop dollar-yen from Y86.15 to Y85.75, but House Speaker Boehner calling Republicans to reconvene Sunday boosted hopes into the NY close and took rate back to Y86.12. Euro-yen saw highs of Y114.32, dropping to Y113.41 before closing back at Y114.01. Strong demand for both pairs into the Asian session, with position adjustments ahead of next week’s Japanese holidays, took dollar-yen on to fresh recovery highs of Y86.64, euro-yen to Y114.70. After the initial exuberance dollar-yen settled between Y86.35/50 and euro-yen between Y114.35/55 ahead of the European open. Euro-yen nudged back up to Y114.60 in early Europe but struggled to make a fresh assault on overnight highs. This stalling prompted Asian accounts to pare longs, with market remaining wary of any US Fiscal Cliff fallout. THe pullback in euro-yen picked up momentum on the move below Y114.00, with stops below Thursday’s pullback low at Y113.40 flushed out before it touched Y113.30. Move took dollar-yen to Y85.95 before recovering, edging to Y86.25 ahead of the New york open.
EasyForexNews Research Team