EUR – Closed in NY at $1.3316 after rate had held between $1.3300-1.3330/35 through Monday. Rate came under pressure in early Asia, sales of euro-Aussie cited for the move, but bids at $1.3300 again cushioned the base, the rate showing a low of $1.3301 before recovering. Rate edged to $1.3315 before the BOJ monetary policy announcement sparked strong demand, led by the spike higher in yen pairs. Euro-dollar spiked through $1.3330/35 to session highs of $1.3358 before momentum faded. Rate eased to $1.3334 before settling above $1.3340 ahead of the European open. Rate picked up a fresh bid tone into early Europe, touching $1.3371 before dropping to $1.3358 after meeting semi official supply. US investment house buys bought the dip but recovery again met resistance above $1.3370. Pressure on euro-yen weighed on euro-dollar, downside momentum picking up on unsubstantiated market talk of German bank profit warnings and a German official resignation. A fall in the Dax led the move lower, triggered stops through $1.3300 and $1.3280 taking rate to $1.3267. Resignation denial prompted a recovery to $1.3300. Strong Germany ZEW data lifted rate above $1.3350 by late morning.
GBP – Closed in NY at $1.5833 after getting pressed to extended lows of $1.5805 in a NY holiday thinned market Monday. The recovery extended to $1.5841 in early Asia, dropping to $1.5829 before picking up fresh demand interest, with the BOJ monetary policy announcement prompting a sharp sell off in yen which allowed cable to push up to $1.5862 before settling between $1.5850/60 ahead of the Europe. Euro-sterling extended gains to stg0.8424 in Asia (NY stg0.8420) as cable recovery lagged euro-dollar. Early demand for euro-dollar into Europe allowed cable to edge up to $1.5864 but euro-sterling breaking higher then countered. Cable dropped back to $1.5818 as the cross edged on to stg0.8440, but a euro sell off, driven by market rumour, countered this early move, the cross dropping through stg0.8400 to stg0.8889, while cable was dragged reluctantly down from $1.5838 to $1.5810. Asian sovereign buys into the cable dip countered the move, the rate able to correct above $1.5820 before euro-dollar’s rapid recovery on rumour denial took cable to $1.5848 as the cross faltered around stg0.8430. Sterling’s underlying negative tone remains in place, market awaiting PM Cameron UK/EU speech, BOE Minutes Wednesday and Q$ GDP Friday.
JPY – Dollar-yen opened in Asia at Y89.65 and lifted to Y89.88 on the Asahi News article that suggested the Japanese govt/BOJ had agreed to specify a time-frame to get inflation to 2.0%. Macro supply pared gains as traders reacted to FinMin Aso inflation comments. The official announcement, BOJ setting inflation target at 2.0% as soon as possible spiked dollar-yen to Y90.13, euro-yen to Y120.16, but upside momentum quickly faded. Some saw the timeframe as ambiguous and led to a sharp reversal, Dollar dropped to Y88.90, euro-yen to Y118.66. Strong yen sentiment in early Europe added weight to the dollar, before US/Japanese bank demand lifted back above Y89.00. The rate met leveraged/real money supply and pressed lower to sit heavy. Euro-yen tracked the dollar before spiking lower following unsubstantiated market rumours that a major German bank had issued profit guidance. The cross flushed stops to Y117.33, before strong ZEW data extended recovery efforts to Y118.40. Dollar-yen slipped to Y88.37, later lifting with the cross to Y88.75.
EasyForexNews Research Team