EUR – Closed in NY Friday at $1.2989 after rate had traded with a positive speculative tone through Europe and NY on anticipation that the weekend would bring a deal for Cyprus. Rate had seen highs around $1.3010 after recovering from sub $1.29 following the brief set back provided by the weak release in Germany Ifo. The rate came under pressure into early Asian dealing as traders reacted to the failure to find an agreement for Cyprus ahead of market opening. Rate pressed to lows of $1.2943 before recovering. Rate edged back to $1.2980 before getting a boost as news filtered through that a tentative agreement had been reached. Euro-dollar spiked on to $1.3031, then on to $1.3048 as agreement details were announced. Rate held firm into early Europe but sellers began to emerge, prompted by negative Moody’s comments concerning France banks. Leverage and CTA were stand out sellers as rate squeezed lower, the move gaining momentum as traders looked for the buy the rumour, sell the fact trade with rate dipping under $1.3000 before meeting support at $1.2985. Rate recovered through the balance of the morning but met willing sellers into $1.3020 (traders adding to earlier short positions) which countered.
GBP – Closed in NY at $1.5230 after rate had traded with an underlying firm tone through Friday’s session as it extended its recovery to a high of $1.5248, off pre BOE Minutes lows of $1.5027 seen last Wednesday. Rate saw a sharp move higher into early Asian dealing with stops through $1.5260 triggered to take it on to a high of $1.5280. Move was seen in thin conditions with the early euro sell off dropping euro-sterling from its NY close of stg0.8530 to stg0.8491 which provided the upward thrust in cable. Euro recovery, the cross pushing back to stg0.8550/60, saw cable sink back to $1.5220 before it attracted fresh demand that lifted it to $1.5260 before settling between $1.5240/50 into Europe. The announcement by Fitch late Friday that it was putting the UK on ratings watch negative appeared to have had little negative impact, market awaiting S&P verdict. Leverage names were cited for taking cable to extended pullback lows of $1.5210 into early Europe, though rate was able to recover to $1.5238. Euro-sterling picked up demand on end of month positioning, the rate edging back up to overnight highs which pressed cable down to $1.5204 and was holding heavy late morning.
JPY – Dollar-yen pressed to an early low of Y94.26 as it took its early lead from the opening negative pressure on the euro as no agreement had been reached, euro-yen eased from Y122.75 to Y122.12. Euro recovered with the announcement of a tentative Cyprus deal, then confirmation, took the cross up to Y123.85, dollar-yen to Y94.97. Offers placed ahead of Y95.00 countered and allowed for a pullback to Y94.70 before fresh demand edged rate back to Y94.94. Failure to push through Y95.00 prompted spec longs to cover back, the rate later eased to Y94.65, euro-yen settled around Y123.40. The cross opened heavy in Europe and slipped with euro-dollar to Y122.84 as traders reacted to the Cyprus news overnight. Dollar-yen tracked the move to Y94.58 with real money/corporate names as the stand out sellers. Support in the dip cushioned, fresh demand extended recovery efforts lifting euro-yen to Y123.35, dollar-yen to Y94.81, before light profit take sales eased ahead of NY. Strong resistance remains into Y95.00, a break opens techs at Y95.03/07 (22 Mar high, 5-day ma), ahead of strong offers at Y95.15/20 with stops set.
EasyForexNews Research Team