The Euro opened the US session at 1.2855 (8:00 am ET) and was initially lower as New York traders absorbed the news of the weak Eurozone GDP data (Q1 -0.2%, forecast -0.1%, Q4 -0.6%) and sold the currency to a low of 1.2843. Wihin half an hour the euro had recovered 40 points to 1.2888, which proved to be the high for the American session.
The Empire Manufacturing and PPI data at 8:30 ET, slightly weaker on the factory side (-1.43 versus the 4.0 forecast) and a touch deflationary in prices (-0.7% versus the -0.6% forecast) propelled the euro in the above mentioned rebound. Lower US Treasuries yields, responding to the same data, assisted the euro upswing.
Euro/yen selling then took the rate back to 1.2860 but disappointing April US industrial production (-0.5%, forecast -0.2%) and capacity utilization (77.8%, forecast 78.3%) figures brought the euro to 1.2886 but again the recent dollar bias asserted and the single currency eased back to the afternoon low of 1.2847 just after twelve o'clock. helped by higher yields in US Treasuries. As Treasury yields fell back the euro slowly crept higher closing close to session high at 1.2887.
Dollar/yen opened the US session at 102.70 which was the high for the session and the day. Although the market had one eye on the reported barriers at 103.00 the dollar was sold from its strongest levels ahead of US data down to 102.40. With the market already heavily positioned against the yen, it suffered a sharp move lower to 101.85 as stops at 102.20 and 102.00 were triggered. Stops in euro-yen helped to exaggerate the decline but then with executions clear and yields in US Treasuries climbing 5 basis points the dollar/yen quickly reversed to a high of 102.55.
Equities then came off their best levels and with Treasury yields fading slightly the dollar/yen drifted down to 102.12 before closing at 102.30. First quarter GDP will be released in Japan with 0.5% Q/Q expected and a 2.7% annualized rate.
Market News International & WorldWideMarkets