Daily Forex Overview

Previous session overview

The Swiss franc fell to multi-month lows against the euro and dollar in Asia Friday as market participants said Switzerland's central bank made a rare and aggressive intervention to curb its currency.

The euro spiked around 0300 GMT to CHF1.4905, its highest since Dec. 28, from CHF1.4635. The dollar jumped to CHF1.0800, its highest since Aug. 18, from CHF1.0670.

Two dealers said they saw franc-selling orders under the name of the Swiss National Bank. The central bank was bidding for euros at CHF1.49, far above the spot rate of CHF1.46, they said.

The dollar and euro were stronger against the yen as investor's squared yen-long positions after steep gains overnight by the Japanese currency when investors fled risky assets amid stock falls and sovereign-credit worries. At 0530 GMT, the dollar was at JPY89.65, down from JPY88.94 Thursday in late New York, and the euro was at JPY122.90 from JPY122.20.

Euro plunged to a more than eight-month low against the dollar and a nearly 1-year low against the yen as worries that Portugal as well as Spain would face financial problems as Greece continued to pressure the single currency lower on Thursday.

Pound gained slightly after the Bank of England (BOE) left rates unchanged and suspended its "quantitative easing" program. However, BOE said that they may make asset purchases if needed. The comments suggested recovery in the UK will be at a slow pace.

The Australian dollar slid in Asia trade Friday as markets weren't able to overcome a wave of global risk aversion that pushed on the currency overnight. That same fear of risk drove Australian bonds higher.

Market expectation

EURUSD drops back below USD1.3700 as the euro comes under fresh assault. Rate falls from recovery highs around USD1.3725 to USD1.3685/80 area. Support seen placed around the overnight lows at USD1.3669, with further interest seen between USD1.3660/50.

For Pound resistance seen placed toward USD1.5750 (USD1.5748 61.8% USD1.5776/04) ahead of USD1.5760 (76.4%) and USD1.5775/80. Support remains in place between USD1.5705/1.5690 with stops below, which if triggered to open a deeper move toward USD1.5660/50.

Dealers said the bias remains yen-positive as risk appetite is still low due to lingering concerns European public finances.

European stocks are expected to open lower Friday, as markets fear that debt levels in the euro-zone's 'peripheral' countries will escalate, and the worries will spread to other European economies.

Investors will be closely watching for U.S. nonfarm payrolls data for January due at 1330 GMT. If the report misses economists' forecasts as it did last month, the yen would benefit most, dealers said. Economists in a Dow Jones Newswires poll expect payrolls to be unchanged in January from December.

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