Daily Forex Overview

Previous session overview

Higher Japanese stock prices and a positive outcome from the Federal Open Market Committee meeting overnight revved up players' risk appetite, lifting the dollar and euro up against the yen in Asia Thursday.

Some investors had expected the FOMC might increase its future Treasury buying to support the U.S. economy, which is usually a negative factor for the dollar as the nation's interest rates decline.

So far in Asia, Japanese importers and security firms and non-Japanese commodity trading advisors were seen selling the yen for the dollar, euro and Australian dollar, dealers said.

The euro continues to be the grand benefactor of the dollar's weakness, strengthening yet another percent against the USD in overnight trading. The euro is also stronger against the CHF and GBP following the SNB's possible intervention.

The Pound was well supported by investors but USD strength won in the end pushing the pair from USD1.6600 to USD1.6400 late in the US session. The lack of expansion in US Treasury Buying from the FED supported the dollar post FOMC. EURGBP slipped back under 0.8500.

Upbeat assessments on the domestic economy and firmer equity markets lifted the Australian dollar in Asia Thursday, while interest rate futures slumped dangerously close to key support levels, a breach of which could set up further losses, analysts said.

Market expectation

The euro and dollar are higher against the yen on Thursday, with traders citing yen sales by Japanese industrial companies after the Fed meeting.

The U.S. currency will likely rise for the rest of this week, some dealers said, because the FOMC did not take additional simulative measures such as boosting its Treasury purchase program.

European stocks are expected to open marginally weaker Thursday, with investors happy to book some profits following Wednesday's gains following the conclusion of the latest rate-setting meeting from the Federal Reserve.

Renewed euro-yen demand emerged, this time lifting the EURUSD to a session high of USD1.3976 before settling back within USD1.3950/70 into the European session. Rate currently trades around USD1.3965 with some seeing potential for further corrective recovery in the rate. Offers seen placed at USD1.3975/85, a break above to open a move toward USD1.4000/05, with stops placed on a break of USD1.4010. Through here stays area between USD1.4040/50 to beckon. Support seen placed at USD1.3925/20 ahead of USD1.3910/00 and NY low at USD1.3888.

Euro-sterling, which had consolidated Wednesday's corrective pullback by holding under stg0.8500 between stg0.8480/93, has edged back above the figure as sterling continues to pare recovery gains. Cable support USD1.6405/395, a break to allow for a deeper move toward USD1.6370, with demand from this level extending toward USD1.6350. Resistance seen placed at USD1.6470/80 ahead of USD1.6500/10.

The pace of the dollar's climb, however, will likely be slow because players are unwilling to make aggressive bets ahead of non-farm payrolls data and business activity indexes from the Institute for Supply Management due next week, said dealers.

Later in the global day, market participants will turn their attention to U.S. weekly jobless data, and if the result shows an improvement and pushes up U.S. stock prices, the dollar may extend its climbs, dealers noted.

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