by Daren Walker - Market News International
May 16 Thursday 10:50 GMT
LONDON (MNI) - EURO SUMMARY: Euro-dollar closed the NY session Wednesday at$1.2883, having recovered off an afternoon session low of 1.2847 (the rate having seen lows earlier in the day of 1.2843 after getting sold lower onrelease of weaker than forecast Germany GDP data) to 1.2888 ahead of the close.Rate reversed tack into early Asia, easing to 1.2873 before bouncing to$1.2889. Failure to push on toward $1.2900 prompted short term specs to coverback, the sales easing the rate to overnight lows of 1.2867 before it recovered to 1.2875 ahead of the European open. Rate extended recovery to $1.2880 into Europe but this move was quickly reversed on general dollar demand, seen led by a targeting of the Aussie barrier at $0.9850, with rate breaking down to $1.2857. Recovery to $1.2872 met renewed sales which pressed rate back to retest the NY pullback low at $1.2847. Decent demand emerged into the dip under $1.2850 which allowed rate to edge back to $1.2877, the move up aided as EZ CPI data came in as expected after some had suggested the release could show some further softening. Bids remain between $1.2850/40, more at $1.2825/20. Resistance seen now at $1.2890/1.2910. Attention turns to US CPI and weekly claims at 1230GMT.
STERLING SUMMARY: Cable closed in NY Wednesday at $1.5232 after it had
bounced between $1.5174-$1.5273 with the softer euro, following release of
weaker than forecast Germany GDP data, providing buoyancy for cable and a
counter to dollar strength. Strong UK jobs data and an upbeat BOE Inflation
Report also aided sterling, though traders continued to suggest that cable has
room for lower levels, but this could remain tempered in part by further
slippage in euro-sterling. Cable initially dipped to $1.5224 in opening Asian
trade before bouncing in tandem with euro-dollar to $1.5248. Failure to break
above $1.5250 prompted a reversal which saw rate press down to extended pullback
lows of $1.5216 before it settled around $1.5230 ahead of the European open.
Euro-sterling was contained within stg0.8450/58 allowing cable to track
euro-dollar moves. Cable came under fresh sell pressure into Europe, the rate
reacting to general dollar demand as early market targeted Aussie barriers at
$0.9850. Cable traded to an eventual low of $1.5197, but reported demand
interest placed between $1.5205/195 cushioned the move. Rate recovered late
morning to $1.5229. US CPI and weekly claims at 1230GMT to provide direction.
YEN SUMMARY: Dollar-yen closed a volatile US session at Y102.26 after rate
had extended recent recovery highs to Y102.75. Release of stronger than forecast
headline Japanese GDP data provided the rate with an added boost but failed to
move above Y102.30 in early Asia, with component capex falling 0.7% Q/Q, as well
as the deflator index dropping to -1.2% from -0.7%. Exporter sell interest
emerged into the Tokyo fix to press the rate lower, touched Y101.97 before
settling back around Y102.20 through afternoon trade. Broad dollar demand in
early Europe lifted dollar-yen to Y102.45, before bond related sales from real
money accounts briefly stalled. With momentum beginning to re-build fresh demand
emerged taking the rate to Y102.54, flushing light stops on the move. Euro-yen
tracked the bounce and lifted to highs of Y131.93, before strong supply ahead of
Y132.00 pared light gains. The corrective pullback extended to Y102.37/Y131.57
where support in the dip cushioned ahead of eurozone CPI data. Euro-yen spiked
on release that came in-line with expectations through Y132.00 to an eventual
high of Y132.05, dollar-yen advancing to Y102.58. The underlying tone remains
buoyant ahead of NY.
The main US data releases are due at 1230GMT, with the release of Jobless
Claims numbers for the May 11 week, the April Housing Starts and Building
Permits data, along with the April Consumer Price Index data.