EUR – Closed in NY Tuesday at $1.2860 after rate had experienced a violent swing from lows of $1.2828 to $1.2890, eased to $1.2842 before recovering into the close. Rate touched an initial low into Asia at $1.2852 before lifting back on euro-yen demand, the rate edging to a high of $1.2867 before momentum faded as it met fund supply. Strong dollar-yen demand influenced the rate lower, taking it to a session low of $1.2838 before recovering toward $1.2850 into Europe. Recovery extended to $1.2855 in opening trade before sellers emerged to take rate through residual stops through $1.2840/30 before meeting demand at $1.2817. Rate recovered to $1.2848 before another wave of strong selling reversed the move and took rate to $1.2800. Middle eastern buys cushioned but weak EZ confidence data allowed for a show to $1.2799, taking out barrier interest at $1.2800. Recovery to $1.2813 again met sellers that punched rate back below $1.2800, this time extending the move through reported bids to $1.2790 before touching a low at $1.2788. Recovery efforts remained shallow and was keeping downside in focus. Bids $1.2780, more stops $1.2770.
GBP – Closed in NY at $1.5159 after recovering off a late pullback low of $1.5142 (intraday low $1.5135). Rate touched $1.5154 into early Asia before fresh demand emerged to take it to an overnight high of $1.5168. Recovery faltered as strong dollar-yen demand emerged, prompting general dollar buys which weighed taking cable to eventual lows of $1.5149. Rate recovered ahead of Europe to $1.5164, settling around $1.5155 into the new session. Euro-sterling was contained within a range of stg0.8473-0.84855 in Asia having seen a recovery high of stg0.8499 Tuesday, off lows of stg0.8460. Cable dipped to $1.5145 in early Europe, only to bounce back to $1.5181 as euro-sterling was pressed through stg0.8460 on reported UK clearer sales. Cable drifted back to $1.5161 ahead of UK data release, while the cross edged to stg0.8461 from a low of stg0.8453. Final Q4 GDP came in as expected, but release of FPC bank capital, showing a stg25bln shortfall in 2012, prompted a sharp sell off in sterling. Cable dropped to $1.5120, the cross spiking to stg0.8475. However, Mid east cable demand cushioned the move and allowed for a recovery to $1.5140, while the cross pared react gains. Cable settled around $1.5120 late morning.
JPY – Dollar-yen opened firmer in Asia and lifted to Y94.71, before profit take sales eased as traders played the tight range. Fresh demand emerged through the Tokyo fix that took it on to an eventual overnight high of Y94.91, the demand seen linked to speculative plays on suggestion that Friday will see strong government pension fund demand, as well as toshin issuance, later easing to Y94.70. Euro-yen tracked the dollar and after printing highs of Y121.87, settled around Y121.60. The yen pairs bounced in early Europe with euro-yen lifting to Y121.80, before the rate stalled. A turn in sentiment pressed and euro-dollar slippage through the $1.2825 barrier took the rate to Y121.13. Attempted recovery met further headwinds and the pair ground lower hovering around Y121.00, euro-dollar’s break of the next barrier at $1.2800 gave added momentum to print lows of Y120.88. Dollar-yen mirrored the cross and after initially rising to Y94.79, rate traded heavy printing lows of Y94.46. Recoveries light with the pairs at Y94.53/120.93 ahead of NY.
EasyForexNews Research Team