EUR – Closed in NY Thursday at $1.3059 after rate had seen a whippy reaction to the ECB 25bp refi rate cut, the initial drop to $1.3122 then recovery to $1.3218 was followed by an extended drop to $1.3037 (55-dma $1.3035 Thursday, today at $1.3031) as markets reacted to Draghi comments that technically he was open to negative interest rates. A Tokyo holiday saw trade subdued through the Asian session, with the release of key US employment data this afternoon also acting to quieten activity. Rate touched an early low of $1.3056 in Asia, with rate slowly creeping up to $1.3078 before drifting to $1.3070 ahead of the European open. Rate dipped to $1.3064 in opening Europe trade before quickly reversing higher, the move through the Asian high and then above $1.3100 helped by ECB Nowotny comments suggesting markets had over interpreted deposit rate signal. Rate edged to an initial high of $1.3113, dipped to $1.3088 before picking up fresh demand that took it on to $1.3137 in late morning trade. Offers seen placed into $1.3150 ($1.3149 61.8% $1.3218-1.3037). US employment report at 1230GMT moves into focus, median seen at 140k, whisper number suggestion of 110k.
GBP – Closed in NY Thursday at $1.5528 after it had been dragged to a session low of $1.5496 on euro-dollar ECB react slippage, though euro-sterling getting pressed down to stg0.8405 diverted some of this negative pressure. Cable managed to recover to $1.5540 ahead of the close. Rate touched $1.5527 into Asia before recovering to a high of $1.5541. Rate then drifted lower, meeting support ahead of $1.5520 as it sank back to $1.5521. Tokyo holiday and usual pre NFP markets tended to subdue general trade. Cable moves overnight were driven by euro-dollar moves, while the cross consolidated Thursday’s pullback between stg0.84085-0.8423. Cable managed to track euro-dollar’s positive react to Nowotny comments, the rate edging to an extended high of $1.5545 before pulling back to $1.5518 as euro-sterling broke above its overnight high. Whisper suggestion that the UK services PMI would come in in the low side of expectation weighed on sterling, but buyers re emerged into the release, the strong number spiking the rate from $1.5530 to an eventual high of $1.5555. Short covering in the euro continued, edged the cross up to stg0.85495 late morning which provided a counter to further cable advance.
JPY – Closed in NY Thursday at Y97.98 after rate had been driven to session highs of Y98.39 from around the Y97.20/25 area on reaction to the ECB rate cut, dropping back to Y97.60 on Draghi comments on negative interest rates, with moves mainly driven via euro-yen. Rate touched a low of Y97.90 in early Asian trade with recovery efforts only able to edge rate back to Y98.08, before rate settled around Y98.00 amid quiet markets with the Japan holiday. Euro-yen held above Y128.00 in Asia, opening flat in Europe around Y128.15. Early comments from ECB Nowotny on CNBC that said there had been an over-interpretation on deposit rates spiked the cross to Y128.50, profit take sales eased, before fresh demand extended to Y128.92. Dollar-yen was dragged higher on the move through tech resistance, before stalling at Y98.25. Rate pared light gains and consolidated around Y98.15, the cross at Y128.80