EUR – Closed in NY Tuesday at $1.3165 after the euro took advantage of a data weakened dollar, as well as pre FOMC positioning, to push to session highs of $1.3186, correcting to $1.3146 on London fix supply before edging higher into the close. Asia trade was described as very quiet due to the May Day holiday, early dealing in euro-dollar holding a tight $1.3160/70 range before lifting to highs of $1.3179 then settled between $1.3160/70 into Europe. European markets were also impacted by the holiday, most centres closed, but activity did manage to liven up a bit. Middle east demand cited for taking the rate through NY highs of $1.3187 and on to an eventual high of $1.3195 before move met headwind supply ahead of key April highs at $1.3202. However, corrective pullbacks remained shallow leaving rate to keep focus on that $1.3200/05 area, despite reports of usually directional sellers appearing into the highs. Attention to turn to US ADP and ISM reports into the afternoon ahead of FOMC later, with ECB rate decision Thursday and US NFP Friday noted on the horizon.
GBP – Closed in NY Tuesday at $1.5535 after rate had been pulled to extended highs of $1.5570 on euro-dollar’s stronger recovery, while euro-sterling diverted some of this upside pressure as it edged to day’s highs of stg0.8485. Cable was pressed back to $1.5524 around the London end month fix (euro-sterling eased to stg0.8460 then edged back around stg0.8475) before it settled between $1.5530/40 into the close. Cable touched an early low of $1.5528 in a holiday thinned Asian session before edging to $1.5547 (50% $1.5570-24). Rate drifted back, settling between $1.5530/40 into Europe. Euro-sterling consolidated between stg0.8470/80 through Asia. UK Nationwide house price showed improvement though missed expectation, more interest was seen on the PMI mfg data. Cable edged up to challenge resistance at $1.5550 but backed off to retest overnight lows as euro-sterling rallied to retest Tuesday highs. However, the cross backed away ahead of PMI, as middle east bought cable, taking the rate to $1.5555 into release. The strong number spiked rate to $1.5591 before meeting headwind supply.
JPY – Closed in NY Tuesday at Y97.44 after rate had been pressed to extended lows of Y96.99 (the move reported to have triggered a barrier at Y97.00). The soft tone in dollar-yen continued in Asia, the markets here thinned by the May holiday. Rate was pressed back to Y97.05 before fresh demand cushioned and allowed it to recover to Y97.40. Dollar then settled between Y97.23/37 as traders reported leveraged/real money names active throughout the session. Euro-yen slipped to lows of Y127.85, later recovering to settle around Y128.10/20. Dollar-yen opened around Y97.30 and lifted on cross demand through Y97.50, the pair flushed stops on the move before easing to Y97.45/40. Euro-yen edged to Y128.45 amid light flow, before it too pared light gains. Euro-dollar’s extended recovery boosted sentiment, stronger than expected UK PMI mfg data gave markets a further boost as the yen pairs spiked to Y97.68/128.88, before profit take sales eased to Y97.55/Y128.72.
EasyForexNews Research Team