EUR – Euro-dollar closed in NY Thursday at $1.3050 after rate had seen recovery highs of $1.3096, repulsed ahead of $1.3100, the move down to $1.3043 ahead of the close seen as a reaction to Wall St turning negative and failure in Italy to elect a new president after two electoral attempts. Rate marked early lows in Asia at $1.3047 before performing a steady, slow recovery, aided by a positive move in equities (rumour in Asia that Morgan Stanley will include China A shares into the MSCI EM index boosted Shanghai), the rate pushing to highs of $1.3076 (61.8% $1.3096-43) before upside momentum faltered and rate drifted off, settling between $1.3061/69 into Europe. Rate picked up further demand into Europe, the buys taking the rate to an initial high of $1.3084 with traders noting early interest from a German corporate. Rate eased on order exhaustion but met semi official demand sitting at $1.3060 which underpinned. Demand into the 0900GMT fix took rate to extended highs of $1.3098 but faltered ahead of $1.3100. Rate drifted off again, settling back below $1.3090. Light US data calendar with focus set on Germany Weidmann/Shaeuble press breakfast in Dc at 1130GMT.
GBP – Cable closed in NY Thursday at $1.5279 after rate had been pressured to session highs of $1.5312, having bounced from its post UK retail sales data react lows of $1.5218, the rate said to have met spec sellers above $1.5300. The corrective pullback was also aided by reaction to late negativity on Wall Street, along with comments from BOE Weale suggesting the UK economy may have contracted in Q1 and that the improving inflation outlook may provide room to manoeuvre on policy. Rate initially edged back to $1.5291 in early Asian dealing, dropped back to $1.5273 before picking up stronger demand that edged rate back toward $1.5300, meeting resistance at $1.5298. However, rate was seen retaining its buoyant tone ahead of the European open, remaining above $1.5290. Euro-sterling closed NY at stg0.8542, with trade through Asia contained by stg0.85365/0.85485. Sterling picked up further demand into Europe which took cable back above $1.5300, with triggered stops through $1.5320, $1.5340-50 able to extend recovery to $1.5368, as euro-sterling broke below stg0.8530 before meeting stronger demand ahead of stg0.8500. Weak talk suggests M&A RHS fix interest behind sterling’s gains, while others link moves to sterling-yen buys.
JPY – Dollar-yen closed in NY Thursday at Y98.20 with early trade into Asia contained within a range of Y98.11/35. Rate was given a boost off the post Tokyo fix low of Y98.11 as Japan’s Aso commented that he had heard no opposition at G20 to the BOJ’s monetary policy. This comment prompted decent demand in yen pairs, taking dollar-yen to session highs of Y98.68, euro-yen to Y128.94, before upside momentum faltered. Profit take sales later eased to Y98.50/Y128.65. Dollar-yen opened on a bid tone in Europe and shot up to Y98.90 on headlines hitting newswires that said hard to buy JGB’s in low interest and buying overseas bonds would be an alternative. Leveraged/real money continued the risk-on tone dragging the rate through Y99.00/10, flushing stops on the move. Asian sovereign demand extended to an eventual high of Y99.34, before paring light gains. Traders reminded of a very large Y99.50 option expiry rolling off for today’s NY cut. Euro-yen quickly lifted through Y129.00 with the dollar, extending to highs of Y129.93, before it too pared gains on noted profit take sales. The yen pairs consolidated gains ahead of NY with targets set on a break of Y100.00.
EasyForexNews Research Team