22 January 2001, 10:57 Europe FX Opening: Summary of overnight moves and what's ahead
By Bridge News
London--Jan. 22--The following is a summary of overnight moves since
Europe's close, plus possible leaders for the session ahead:
KEY ISSUES:
JPY continues to push higher as positions weigh on USD/JPY, EUR/JPY.
German Dec Ifo Business Climate Index the early focus for Europe.
European Open: EU pressured, JPY firms
The EUR extended Friday's losses in late US/early Asian trading, before
bouncing slightly on profit taking. USD/JPY, similarly, pushed to new lows
before bouncing, while USD/CHF drifted off Friday's highs. But the week
starts with the EUR continuing to look pressured lower against the USD,
JPY, with USD/JPY also looking vulnerable to more position led sales.
--USD/JPY hit a 12-day low of 116.25 in early Asian trading after
stops were taken out below 116.95, though pulled back to the 117.10 region
during the Asian morning. Selling from Japanese corporates around the high
then sent the pair back to 116.50. Dealers report further interest to sell
at these higher levels. Following contradictory statements on JPY weakness
from the BOJ's Hayami and Finance Minister Miyazawa, the MOF's Mizoguchi
said the MOF and BOJ have basically the same FX stance. Japan's state
minister for economic and fiscal policy Nukaga, currently caught up in a
scandal surrounding KSD, said he would continue in his post, though the
whole affair could help dampen enthusiasm for JPY gains. The BOJ's monthly
report said the improvement in household income is likely to remain slow
for a while. The index of activity for Japan's service industries rose by
0.6% m/m in December.
--EUR/JPY was pulled to an 18-day low of 108.55 as USD/JPY fell,
though pulled back to the 109.65 region during the morning. US investment
banks were seen selling the cross.
--EUR/USD hit a 5-day low of 0.9330 in early trading before pulling
back to the 0.9370 region. Monday sees the release of the German December
Ifo business climate index at 0900 GMT plus the possible release of the
ICON consumer confidence index for December. Ifo is seen declining to 96.6
from 97.0 In Nov.
Given the EUR is just below the middle of its 0.9288-0.9504 recent range,
Ifo could set the tone for the day.
--USD/CHF drifted off a late US high of 1.6392 to hit 1.6318 late in
the Asian session. US leading indicators for December are released at 1500
GMT.
--EUR/GBP drifted from an early US low around 0.6360 to touch 0.6395
in late Asian trading. Cable hit a near 1-month low around 1.4625 in late
US trading in thin conditions. The pair had bounced to the 1.4665 area by
the Asian afternoon. The UK ITEM club said a big fiscal and rates easing
is needed to support the UK economy (story .10904).
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