EUR – Closed in NY Thursday at $1.3011, the rate having been pressured off intraday highs of $1.3094 on reported macro flow, with Goldman Sachs joining the call for a 25bp rate cut at next week’s ECB decision adding further weight, which pressed it to lows of $1.2988 ($1.2987 76.4% $1.2954-1.3094) before recovering above $1.3000 into the close. Slow start to trade in Asia, euro-dollar making a brief show under $1.3000 at $1.2998 before recovering, the move up aided by firmer gold with another low China yuan fix prompting react dollar sales which took rate on to $1.3048. Pullbacks were contained by demand at $1.3030. Recovery off this pullback low level met resistance at $1.3045 into early European trade with rate pressed through that $1.3030 before meeting support between $1.3015/20. Recovery to $1.3045 was seen on dollar recycling from Asian sovereigns that had been seen dollar intervention buying overnight. Failure to break above $1.3050 prompted rally fading, with middle east providing the added weight as rate again moved down through $1.3030 to $1.3010 (76.4% $1.2998-1.3048 Asia range). Rate retained a slight softer tone in late morning trade. Focus on US Q1 GDP at 1230GMT.
GBP – Closed NY Thursday at $1.5437 after rate had seen highs of $1.5480 following the release of stronger than forecast Q1 GDP data. This data has relieved calls for further QE. Rate saw pullback lows in NY of $1.5428 ahead of the close. Early trade into Asia was contained within $1.5430/40 before it was taken up to $1.5472 on the back of euro-dollar’s recovery. Pullback off this high was buoyed above $1.5450 into Europe. Euro-sterling was pressed to react lows of stg0.8410 (matching Apr1 lows) Thursday, from pre GDP data highs of stg0.8533, with the market having been mainly positioned long into the numbers. The flushing out of these positions provided a good part of sterling’s strength with market now focusing on a chance for an ECB rate cut next week. The cross consolidated between stg0.8422/37 in Asia, trading around stg0.8430 into Europe. Sterling slowly gave up ground through the European morning session, cable meeting support at $1.5446-40 before breaking below the Asia-NY pullback lows at $1.5430-28 to extend the move off $1.5480 to $1.5418 ahead of NY. Move was seen tracking euro-dollar, the cross having met strong resistance into stg0.8450.
JPY – Closed in NY at Y99.30 after rate recovered off lows of Y98.985. Early demand into Asia took rate up to Y99.42 but move quickly saw momentum fade with the reversal lower seen driven by macro profit take sales. The move lower gained momentum as weaker longs were squeezed, the break back under Y99.00 taking the rate to early lows of Y98.58, before importer demand allowed it to bounce back above the figure. Fresh supply emerged after the BOJ confirmed no change in policy, large stops were targeted and triggered to take rate on to extended lows of Y98.22 with some linking the move to dollar positioning ahead of this afternoon’s US Q1 GDP data. Asian sovereign demand cushioned which allowed the pair to recover above Y98.50. Euro-yen printed lows of Y127.98, before it too drifted with the dollar to Y128.50. Dollar-yen opened heavy in Europe slipping to Y98.27, before support in the dip ahead of the overnight low cushioned, this allowed a move back to Y98.70 where the rate remained anchored for the session. Euro-yen was tied to a narrow Y128.30-70 range for the most part and lacked direction. The cross heads into NY around Y128.45 with strong support seen into Y128.00 (Y127.98 – Asia low).
EasyForexNews Research Team