EUR – Closed in NY at $1.3046 after rate had clawed its way to a session high of $1.3054, the rate extending its recovery off Friday’s post NFP lows of $1.2955. Early Asia extended the corrective pullback, pressing the rate to early lows of $1.3026, the main weight seen as traders eased euro-yen away from the Y126.00 area. Euro-dollar recovered to $1.3039 before turning lower again before settling around $1.3030 into Europe. Moves through Asia were mainly driven by euro-yen action. Euro-dollar came under fresh sell pressure into Europe, stepping its way to an early low of $1.3003 before breaking under $1.3000 to post lows at $1.2991 ($1.2993 61.8% $1.2955-1.3054). Rate recovered to $1.3024, aided by euro-sterling react to weak UK production data, before it reversed tack to ease back toward $1.3000. Another decent sized $1.3000 strike expiry for today’s NY cut (1000ET/1400GMT) seen providing attractive influence. A very light US data calendar for today with moves to be influenced by US yield plays. Traders look for a clear break outside $1.2950/1.3050 to provide next direction.
GBP – Closed in NY Monday at $1.4914, easing from a recovery high of $1.4933 after rate had seen lows of $1.4866 earlier in the day. The late NY pullback extended to $1.4910 into early Asia before rate edged to $1.4920 (session highs) before the corrective pullback continued. Rate touched $1.4898, recovered to $1.4912 before pressing to an overnight low of $1.4885. Failure to push back above $1.4900 saw rate drift back toward overnight lows into Europe. German name demand in early Europe lifted cable through $1.4900 and onto $1.4916, the move allowing euro-sterling to break its overnight stg0.8740/50 range to stg0.8719. The pound was holding off best levels ahead of UK production data, cable around $1.4907, the cross around stg0.8729. Release of much worse than expected data prompted strong sterling sales which took cable through barrier interest at $1.4850 to a low of $1.4832, while the cross spiked to stg0.8777. However, market was well positioned short sterling into the data and took advantage of the dip to cover back, allowing cable to edge back above $1.4850, while the cross backed away from the stg0.8780 area, with corporate selling noted.
JPY – Opened in early Europe at Y96.42 and Y125.47. Dollar-yen extended its recovery into early Asia, the rate pushed on from a NY close at Y96.29 to Y96.71 as traders reacted to a press report suggesting BOJ Governor nominee Kuroda could call an early, unscheduled, BOJ meeting Mar20. This bringing forward of possible action ahead of FY end caused yen to be sold off cross the board dropping rate back to Y96.43. Euro-yen saw similar moves, the rate pushing to an early high of Y126.04 before rate was pressed to a low of Y125.37. Dollar-yen continued heavy in early Europe and pressed to lows of Y96.03 after comments from DPJ lawmaker that said the party to oppose Iwata for BOJ. Hedge fund supply added weight and flushed light stops on the move. Asian investment demand cushioned before sentiment turned on release of soft UK production data. Cable slipped to 2 1/2 year lows taking the dollar down to Y95.76, later extending to Y95.64. Euro-yen tracked dollar moves to Y124.39 and sits heavy ahead of NY.
EasyForexNews Research Team