EUR – Short covering in early Asia briefly lifted to $1.3054 before fresh selling emerged and pressed lower. Stop-losses were flushed through $1.3040 and $1.3030 to print lows of $1.3019, before meeting demand from a US named bank. The rate made an attempted recovery and ground to $1.3040 ahead of Europe. Euro-dollar opened heavy and eased to $1.3030 on real money sales, Asian sovereign supply added further weight to $1.3005. Reports in a morning note from UBS that said they see a rating downgrade for the US within 3 months also contributed to the move. Corporate demand bounced off lows before further sales pressed to $1.3003 where strong support into $1.3000 cushioned moves. Euro-dollar later recovered to $1.3015 ahead of NY, and as markets continue thin focus turns to release of US Non-Farm Payrolls at 1330GMT. Forecasts expect a rise by 150,000 in December after increasing by 146,000 in November.
GBP – Early demand in Asia lifted cable to $1.6099 before fresh selling emerged and pared light gains. Stops flushed in euro-dollar added further weight and extended losses to $1.6059, before the rate settled in a tight range ahead of Europe. Euro-sterling slipped to stg0.8100 where the rate met strong support, held firm, and recovered to stg0.8114 amid light flow. Sterling continued under pressure in choppy European trade and cable flushed stops through $1.6050, the rate extended losses to $1.6041 on release of weaker than expected UK PMI Services data that saw a fall to its lowest since Apr 2009. The pair made an attempted recovery, before fresh sales emerged taking it to extended lows of $1.6027. Euro-sterling made a show under stg0.8100 in early Europe,before lifting to highs of stg0.8121 on broad sterling weakness.
JPY – Dollar-yen opened on a bid tone in Asia and after strong demand from importers and custodial names took out the Y87.50 barrier, the pair flushed stops on the move and extended to highs of Y87.76. Asian reserve manager supply pared light gains, profit take sales added further weight to Y87.56. Fresh demand bounced and the rate lifted to its highest since Jul 10, peaking at Y87.83, before easing to Y87.75 ahead of Europe. Euro-yen tracked dollar moves and lifted from Y113.80 to Y114.52 into the European open. Risk appetite continued and dollar-yen extended gains on Asian sovereign demand, taking out the Y88.00 barrier in the process. The rate flushed stops on the move and stalled at Y88.33, before profit take sales pared light gains. Euro-yen initially slipped to Y114.26, before tracking dollar-yen’s buoyant tone to Y114.96. Strong resistance checked moves and the pair later eased to Y114.80. Traders look ahead to release of US Non-Farm Payroll data at 1330GMT for further direction.
EasyForexNews Research Team