USD: The Dollar was able to rebound, although clearly underperforming the Yen as a safe-haven destination at the start of this week. Last night’s disappointing Chinese GDP and Industrial Output numbers have given additional fuel to a “risk off” mood throughout global markets, which will provided the Dollar with some measure of underlying support. However, last Friday’s weak readings on Retail Sales and PPI are going to dampen sentiment for the Dollar this morning, particularly with today’s second-tier US data unlikely to provide any strong boost to the market. As long as risk aversion dominates the marketplace, the Dollar should be able to build on this morning’s recovery. The Dollar may rally up towards the 82.57 level later today, with further gains likely to be held in check until there is a better tone from US economic data. The Commitments of Traders Futures and Options report as of April 9th for USD showed Non-Commercial traders were net long 49,429 contracts, a decrease of 4,770 contracts. The Commercial traders were net short 55,176 contracts, a decrease of 4,319 contracts. The Non-reportable traders were net long 5,749 contracts, an increase of 453 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 55,178 contracts. This represents a decrease of 4,317 contracts in the net long position held by these traders.
EURO: The June Euro is holding up fairly well given the negative shift in risk attitudes early this week, but is unlikely to revisit last week’s monthly high unless there is a considerable improvement from outside markets. While the Euro group meeting over the weekend may have made some tangible progress with Portugal and Ireland, most of that benefit was lost in the aftermath of last night’s weak Chinese data. As long as peripheral EU trouble-spots stay quiet, then peripheral EU debt yields can remain subdued and the Euro should remain fairly well supported in this recent consolidation price range. Given the carnage seen in other markets over Friday and this morning, however, it would not take much in the way of negative news from the peripheral EU in order to send prices swiftly back to the downside. The June Euro may find support around the 130.55 area during today’s session, and will be hoping for a sizable improvement with risk attitudes both inside and outside the EU in order to regain upside momentum. The Commitments of Traders Futures and Options report as of April 9th for Euro showed Non-Commercial traders were net short 52,302 contracts, a decrease of 11,088 contracts. The Commercial traders were net long 73,109 contracts, a decrease of 9,180 contracts. The Non-reportable traders were net short 20,806 contracts, an increase of 1,907 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 73,108 contracts. This represents a decrease of 9,181 contracts in the net short position held by these traders.
JPY: The June Yen continues to post solid gains this morning, but has already seen a moderate pullback from the overnight highs. The Yen was already given a sizable boost after Friday’s close from the US Treasury’s semiannual currency report, which mentioned that Japan should “refrain from competitive devaluation”, and will carry extra weight going into the G20 meeting later this week. Last night’s lukewarm Chinese data provided the main source of overnight support, as it drove flight-to-safety funds back across the Pacific and into Yen. This overnight strength has helped the Yen fill in the chart-gap from last Monday’s highs, which had provided an upside target for this post-low bounce. With global market seeing a “risk off” mood this morning, the Yen is likely to remain well supported for the balance of today’s session. The June Yen may rise up towards the 102.48 area later in the session, but will need more than safe-haven support to extend this rally up towards the mid-March lows.
CHF: The June Swiss was unable to hold onto today gains in the wake of last night’s Chinese data, but is doing relatively well given the risk aversion seen throughout global markets. The Swiss Franc will find some measure of safe-haven support during today’s trading, but is unlikely to re-test last Friday’s high for the move unless global market risk sentiment can see a vast improvement. The June Swiss may fall back towards the 107.40 area later today, but is likely to outperform the other major European currencies during today’s trading session.
GBP: The June Pound made a sharp downside move after last night’s Chinese data and has been unable to sustain any sort of recovery this morning. Given the increasingly negative tone from outside markets, and with little in the way of fresh UK economic data to boost market sentiment, the Pound may be in danger of falling back towards last week’s lows. The June Pound will find near-term support around the 152.88 level this morning, but looks to remain on the defensive during the balance of today’s trading session.
CAD: The June Canadian is getting hammered this morning, and is closing in on posting a new monthly low. While last night’s Chinese data has been a large source of pressure for the “commodity” currencies, today’s meltdown in the metals and energies markets is likely to drive the Canadian Dollar even further to the downside. Unless global risk attitudes improve in a hurry, the market may be heading back towards the mid-March lows during the next few sessions. The June Canadian could slide down towards the 97.35 area later today, and needs plenty of help from outside markets in order to put the brakes on this downdraft.
EasyForexNews Research Team