EUR – Closed in NY Thursday at $1.3262 after ECB Draghi hawkish comments at the ECB meeting press conference spiked rate to a high of $1.3273 from pre comment levels of $1.3114. Early Asia took over the baton of euro demand, extended the move to $1.3280 with early euro-yen buying the main driver. However, euro-dollar met decent sell interest at this level (traders noted an Asian sovereign was fading the move from above $1.3270) which capped the early enthusiasm and allowed rate to drift lower on profit take covering to $1.3251. Recovery efforts off this level were then restricted to $1.3265 through the balance of the session, trading into Europe around $1.3260. Early sellers into Europe pressed rate down to $1.3249 but move met decent demand and stops below $1.3245 were left intact. Bounce back saw rate edge to $1.3278 but failure to move above $1.3280 prompted profit take selling that eased it to $1.3253. Fresh demand late morning, euro-sterling buys noted, edged rate to an extended high of $1.3284 before it settled back below $1.3270 ahead of NY.
GBP – Closed in NY at $1.6164 after rate had been pulled up to $1.6168 (from $1.6048) by euro-dollar’s stronger recovery following Thursday’s ECB Draghi comments. The lag in cable’s recovery allowed euro-sterling to extend recent recovery to stg0.8212 in NY, closing the session at stg0.8202. Cable extended its recovery in early Asia, again influenced by euro-dollar’s early rise, with rate touching $1.6182 before momentum faded. Cable then drifted off to $1.6144, settling between $1.6145/50 into Europe. Euro-sterling retained its buoyant tone, with trade overnight held within stg0.8205/15. Cable was pressed to extended pullback lows of $1.6140 in early Europe before it bounced to $1.6167. Talk of strong middle eastern offers sitting between $1.6180/85 prompted spec longs to pare back, the rate resting on $1.6140 into UK output data release. Disappointing data prompted a sharp move lower in the pound, cable dropping to $1.6109, while the cross triggered stops above stg0.8225 to take it to stg0.8243. Barrier at stg0.8250 helped cap rise, with market expecting some corporate inflow around the midday area.
JPY – Risk appetite continued in early Asian trade and fresh demand took out the Y89.00 barrier, release of larger than expected Japan current account deficit gave a further boost and the pair flushed stops to Y89.35. Euro-yen tracked the early move and lifted to Y118.59, before supply through the fix, aided by exporter sales pressed to Y117.68, the dollar eased in tandem to Y87.77. Recovery attempts during the afternoon saw gains to Y118.20 and Y89.11, but momentum soon faded. Dollar-yen made a show back above Y89.00 in early Europe to print Y89.10, before cross supply pared gains and the rate extended losses to Y88.86. Tight range trade continued as focus turns to the topside with strong offers reported at Y89.35/40, more ahead of the Y89.50 barrier. The cross lifted on early euro-dollar demand to Y118.27 but soon met supply from Japanese names and eased to Y117.95. Strong offers seen at Y118.40, more at Y118.55/60 (Y118.59 – Asian high).
EasyForexNews Research Team