Daily Forex Overview

Previous session overview

The Swiss central bank's adoption of quantitative easing had an immediate and major effect on foreign exchange markets, although the cut in its three-month Libor target to 0.25% from 0.5% was deemed largely symbolic.

The euro gained against the greenback on Thursday despite dismal economic data from Germany. Indeed, German industrial output plunged 7.5 percent in January - the most since record-keeping began in 1978 - which also brought the annual rate down to a record low of -19.3 percent. EUR churned between USD 1.2730 and USD1.2850, before the NY break took it to above USD1.29.

The British pound weakened against the dollar due to concerns over the UK's banking sector, weak economic data and uncertainty over the effectiveness of BoE's quantitative easing program.

The Japanese yen also declined sharply on Thursday from JPY95.65 to JPY98.53 versus the dollar and from JPY122.12 to JPY126.40 against the euro on the back of the rally in U.S. equity markets and the intra-day rise in oil prices.

The Canadian dollar weakened against the US dollar despite oil rebounding to USD43 a barrel.

The Australian dollar was propelled higher in late Asian trade Friday after Wall Street indices continued to claw back some of this year's heavy losses. Australian dollar was quoted at USD0.6523, up from USD0.6482 late Thursday. Against the Japanese yen, it was at JPY63.77, up from JPY62.39.

Market expectation

The dollar was almost flat against the yen in Asia Friday as players stood on the sidelines ahead of the weekend meeting of financial heads from the Group of 20 nations in London.

Players are divided over whether the meeting will bear fruit, so they are unwilling to bet on any particular direction for now, dealers said.

But otherwise, the greenback is set to resume its fall against the yen next week, other dealers noted.

For Cable offers USD1.3920, stronger toward USD1.3930/35. Further sell interest noted at USD1.3950/55 ahead of USD1.3980/85. Support USD1.3880, more at USD1.3865 ahead of USD1.3850/40. Further demand USD1.3810/00.

EURGBP edged up from stg0.9262 to stg0.9291 in Asia before easing back to stg0.9255 into early European dealing, but renewed demand bounces it back to stg0.9297. Rate currently trades around stg0.9285. Offers seen placed to stg0.9300, more toward Thursday's highs at stg0.9320. Support stg0.9255/50.

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