Previous session overview
The dollar edged higher against the yen in Asia Tuesday, as Japanese importers bought the U.S. unit for a regular settlement, but dealers said the greenback will likely resume its downward trend again soon.
Remarks by Japan’s outgoing finance minister Kaoru Yosano on the undesirability of rapid foreign-exchange movements also helped to support the dollar amid a dearth of trading cues, dealers said.
Elsewhere, the euro gained versus the yen, helped by demand from Japanese importers for a regular settlement, dealers said.
The euro picked up to JPY133.20, compared with JPY132.98 in New York overnight.
The US dollar is slightly weaker than Sydney’s closing level. EUR threatened a reversal, but recovered after noon London to reach USD1.4653, currently at USD1.4605. Euro zone IP revealed the pace of decline has slowed a little.
The Cable was able to trade above the key support for the ascending channel, as we expected, after attempting to breach it to the downside; where the pair is currently facing the USD1.6630 resistance level which may result in volatility, as the pair attempts to breach it to the upside to continue the short term uptrend.
The Australian dollar was whipped around in a narrow range Tuesday but ended stronger as the market absorbed the latest batch of Reserve Bank of Australia policy meeting minutes.
EURUSD getting a clearer report now on sales activity, Asian sovereign and semi official name sold from above USD1.4640, with added supply from Mid East and Russians, the latter providing added supply from the USD1.4610 level that has squeezed rate toward support at USD1.4600. Rate currently trades around USD1.4605. The USD1.4560 strike option expiry for today’s NY cut reported to be for up to E2bln, traders noting that it is a one week deal bought last Tuesday when euro was at USD1.4330 and rallied to USD1.4510 on the day.
Pound eased back, correcting in line with euro-dollar, to USD1.6615 (50% USD1.6585/1.6658) as euro-sterling lifted back above stg0.8790. A break below USD1.6615 may allow for a deeper move toward USD1.6605/95 ahead of USD1.6575. Offers remain in place toward USD1.6660 with interim interest beginning to emerge around USD1.6650.
European stocks are expected to open a notch higher Tuesday, benefiting from positive sessions in the U.S. and Asia overnight, with President Obama’s upbeat comments on the banking sector offering investors further confidence in the financial markets.
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