Range: 1.4159 – 1.4200
Rate was on the rise into early Asia Monday, touching a session high of $1.4200 in initial trade as traders reacted to weekend M&A news of US AT&T agreement to buy Deutsche Telekom’s T-mobile USA, valued at $39bln, with $25bln to be paid in cash. However, this early enthusiasm quickly faded as market turn attention on to a report in the UK’s Mail on Sunday suggesting that the Irish PM will this week surprise EU leaders by telling them that he intends to ‘burn’ bank bond holders. Rate slipped back to mark overnight lows at $1.4160. After the opening volatility, liquidity a slight issue with Japan closed for a public holiday, the rate settled back around $1.4175/80 through to the European open. Offers said to remain in place into $1.4200 with talk of decent sized stops placed on a break above.
Range: 80.63- 81.04
A quiet start for the week after the turmoil of last week and Friday’s intervention, with the dollar opening at Y80.81 in Sydney and the pair trading a Y80.51-81.04 range with Japan on holiday today, but traders are focused on MOF who remain in evidence. Dollar edged higher on some reserve manager buying as traders talked of official bids set at Y81.50 grinding the pair up to Y81.04, but supply from CTA accounts and short term model accounts has capped around Y81.00 for the time being. Market sentiment appears to be growing that the Y80.00 level is pivotal and further intervention likely in coming sessions, should traders target the level. Stops are reported below Y80.50 with some bids ahead at Y80.60. The large Y82.00 hurdle also remains in focus with huge supply from funds and custodians, and Y83.00 is now the rumored supply level from Japanese exporters.
Gold was little changed on the week, gaining 0.1 percent to $1418.56, ensuring that the precious metal would not fall for the second consecutive week. It appeared that investors were ready to sell-off their bullion holdings, with the precious metal falling below $1385.00. Nonetheless, as markets refocused on the geopolitical tensions in the Middle East and North Africa, gold found support and retraced its losses in the early part of the week. The week ahead, fundamentally, should propagate bullish momentum for gold as investors seek haven from risky assets amid renewed political tensions in the MeNa region.