EUR – Closed in NY Monday at $1.3402 after rate had recovered from a NY afternoon dip to $1.3482. Rate had seen lows earlier in the day of $1.3357, lifting in early NY to $1.3428. Euro buoyancy during the NY session was mainly provided by demand for euro-yen, the yen getting generally pressed lower on reaction to US Tsy Lael Brainard comments supporting Japan’s efforts to end deflation. Rate dipped to $1.3394 in opening Asian trade before picking up fresh demand which lifted it back to $1.3412. However, momentum quickly faded, leaving the rate to drift off through the balance of the overnight session to $1.3378. Rate held heavy into early Europe. Rate picked up fresh demand into early Europe which edged it to $1.3393 but sellers quickly emerged with stops sub $1.3380 the early target. Rate pressed down to $1.3364 before meeting decent demand via the crosses, fund demand for euro-sterling providing the main drive as rate pushed up to $1.3408. Move met headwind supply above the figure, the rate then easing down to $1.3380/75. Rate seen range bound, support between $1.3365/50 opposing strong resistance between $1.3420/30.
GBP – Cable closed in NY Monday at $1.5655, off lows of $1.5652, with sterling having been under pressure through Monday’s session as traders adjusted positions ahead of today’s inflation data and tomorrow’s Inflation Report. The move lower in sterling allowed euro-sterling to recover a good part of last Friday’s losses, the rate recovering off stg0.8442 Asia lows before pushing to stg0.8573 in NY. Trade overnight consolidated between stg0.85455 -0.85665, holding around stg0.8550 into Europe. Cable posted an early Asia high of $1.5670 before easing again, the move targeting stops sub $1.5650 as rate pressed down to $1.5642. Early demand in Europe nudged cable to $1.5668, as the cross extended lows to stg0.8541, but move quickly attracted sellers, reports of stops between $1.5630/20 attracted attention. Move through $1.5630/20 triggered stops that took rate to $1.5602. Barrier defence of $1.5600 provided cushioning but rate then dropped to $1.5574 as fund demand for the cross drove it to stg0.8604. Semi official demand supported cable, recovery was aided by UK CPI coming in unchanged, though it struggled above $1.5600 before it sank back to retest lows. Fresh demand emerged into the dip but again $1.5600 offers countered.
JPY – Yen came under pressure in late NY Monday as market reacted to comments from US Tsy’s Lael Brainard supporting Japan’s efforts to bring an end to deflation. Dollar-yen extended its recovery off early Monday lows of Y92.36 to Y94.46 into the close with early Asia pressing the rate back to Y94.13. Fresh demand emerged in Tokyo that took the dollar up to an overnight high of Y94.39, before profit take sales from various Asian names dipped back under Y94.00. Euro-yen slipped to lows of Y125.59, before finding support and recovering to Y125.80. The yen pairs extended recovery pullbacks off earlier lows to Y94.24 and Y126.22 in early Europe. Strong resistance met in dollar-yen pared light gains, UK clearer supply added further weight to Y93.95, the cross followed suit and re-tested the intraday low. Euro-dollar’s clean break of $1.3400 added momentum and lifted the pairs to Y94.20 and Y126.20 as traders awaited release of headlines from G-7. Dollar-yen extended to Y94.35 on release, euro-yen Y126.51, moves also seen attributed to Aso comments.
EasyForexNews Research Team