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Forex: New York Market Summary Euro, Yen, Eur/Yen

Posted by Joseph Trevisani on Aug 6, 2013 6:16:00 PM

EURO

Euro-dollar opened In New York (8:00 am) at 1.3276 after making a brief and limited surge higher in Europe following stronger than expected German factory orders for June, 3.8% vs. 1.0%. The euro lifted from 1.3286 to 1.3295 in the release minute, but one minute later it was back where it had started. That turn continued for another 20 points and 60 minutes, ending at 1.3266, where it reversed again. Before the U.S. trade balance number at 8:30 am it was right where it had been before the German statistic two hours earlier, 1.3286.

The much better than forecast U.S. June deficit, $34.2 billion vs. $43.5 billion and May's revised $44.1 billion, largely on rising American oil production, produced a minor dip to 1.3278, but within 15 minutes traders were again testing 1.3300, with the pair touching 1.3306.

Atlanta Federal Reserve President Dennis Lockhart's comments that the Fed could begin to shrink its bond purchases in September if the economy improves, but is prepared "to delay or even reconsider" if the economy does not, while not news,  may have contributed to the drop back to 1.3286.

The next run higher, just before 10:15 am came after the beginning of a sharp 30 point  drop in usd/yen which eventually made the day's low at 97.51. The euro made the day's high, 1.3223, at 10:52 am a few minutes after the usd/yen scored its low.

Another sharp sell off at the London close, 1.3306-1.3282 in 10 minutes was again limited by buying interest that took the currency back to 1.3300, and had appeared periodically during the day.

Stronger U.S. Treasury yields, the generic 10-year yield was up 4 basis points at the time, had little effect and the euro traded five points around 1.3305 for the remainder of the session.


ScreenHunter 1613 Aug. 06 18.20Bloomberg

YEN

Dollar/yen opened at 98.11 and euro-yen at 130.23 after both had traded to their daily high in Europe, 98.59 and 130.73, within a minute of each other. Dollar/yen spent the first two hours in a tight range of 98.06-98.23, supported by bids at 98.00, while eur/yen moved steadily higher form 130.19 to 130.57, propelled by the euro.

The Dow reached its low around 11:00 am, affected by Lockhart's comments and the tapering prospect. The stock market focused on the possibility of tapering commencing in September and Nikkei futures fell 150 points. As the dollar dropped to 98.05 stops below the figure triggered, driving quickly to 97.51, but not to 97.50, which has marked the bottom since late June and has accumulated considerable buying interest.

Euro/yen fell in concert, breaching the European low at 130.12 and slipping to 129.89, the day's low, just in front of the 55 day moving average at 129.86 and the Tokyo low at 129.81.

In the afternoon dollar/yen traded between 97.60 and 97.80 after a brief London close pop to 97.87 which brought the cross to 130.12. It traded 129.90 to 130.11 in the afternoon.

ScreenHunter 1616 Aug. 06 19.00


ScreenHunter 1615 Aug. 06 18.56

ScreenHunter 1614 Aug. 06 18.53

Bloomberg

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