USD: The Dollar is finding moderate pressure this US morning as prices have consolidated within a tight trading range after the extreme volatility of the past two sessions. Risk appetites appears to be on the mend this morning, but yesterday’s abrupt change in fortune for the Dollar shows that there is plenty of residual anxiety throughout global markets. While the Fed’s Beige Book avoided any negative surprises, the mixed results with recent US economic data has left the Dollar vulnerable to further weakness if the Jobless Claims or Philly Fed numbers disappoint the market. After this week’s whipsaw turnaround in risk sentiment, however, it will be difficult to take the Dollar well below these recent highs without a full-scale “risk on” mood taking hold in global markets. The Dollar may slide down towards the 82.50 level early in today’s session, but will hold onto more than enough safehaven support to hold in close proximity to yesterday’s weekly high.
EUR: The June Euro has been able to grind out a modest rebound early in today’s trading, but is showing little of the upside momentum seen from earlier this week. Comments by a key European Central Bank official that the ECB could ease further if “economic data warrants it” have carried plenty of weight with the market, as there have few positive highlights with recent data from non-German EU nations. With the lack of resolution from ongoing problems in Cyprus, Portugal and Italy, the Euro remains vulnerable to another swift pullback if further news headlines from the peripheral EU rattle market nerves. As long as the region stays out of the market’s focus and peripheral EU debt yields remain subdued, the Euro will continue to benefit from today’s gradual improvement in global market risk sentiment. The June Euro may climb up towards the 130.85 area later this morning, but will need to see much stronger risk attitudes in order to rise well clear of this week’s lows.
GBP: The June Pound has been through a bumpy overnight session, and has bounced back into positive territory early in today’s trading. A sluggish reading on UK Retail Sales may have due in some part to poor weather, but has come on the heels of yesterday’s sluggish Unemployment data and will provide further evidence for the Bank of England to start up fresh easing measures later this year. Improving global risk attitudes are lifting prices clear of yesterday’s lows, but the Pound is unlikely to climb back up towards the recent highs without some consistent improvement with upcoming UK economic data. The June Pound may climb up towards the 152.64 area later this morning, and will have to rely on a stronger tone from outside markets in order to sustain this recovery.
JPY: The June Yen could not sustain any sort of upside momentum during the overnight session, and enters this morning’s trading squarely on the defensive. Yesterday’s Euro collapse provided a brief inflow of flight to safety support, but the prospect of upcoming Bank of Japan easing measures continue to drag prices further to the downside. This weekend’s G20 meeting is likely to provide plenty of fresh rhetoric against “competitive devaluation”, but is highly unlikely to single out Japan for criticism. With global risk sentiment showing signs of improvement, the Yen is likely to see a new weekly low during the next few hours. The June Yen may find nearterm support around the 101.40 level, but we would still be inclined to wait for a near-term bounce back toward yesterday’s highs before putting on long put option strategies.
CHF: The June Swiss was able to find its footing after yesterday’s downdraft, and continues to climb further away from the recent lows this morning. While today’s modest improvement in global risk sentiment will provide underlying support to the Swiss Franc, it will be difficult to fully regain upside momentum unless there is continued improvement with risk appetites both inside and outside Europe. The June Swiss could rise up towards the 107.75 level later this US morning, but is likely to continue losing ground to the Euro as long as EU trouble-spots are able to stay out of the market news headlines.
CAD: The June Canadian is finding plenty of benefit from this US morning’s recovery in global risk sentiment, but will have trouble fully shaking off the impact of yesterday’s Bank of Canada meeting results. While the BOC kept with their “hawkish” bias, a much larger than expected reduction in their growth forecast for the Canadian economy will cast a long shadow over the market over the near-term. The June Canadian could take today’s rebound up towards the 97.70 level this morning, and will need to see much stronger gains from energy and metals markets in order to regain any sizable portion of this week’s steep losses.
EasyForexNews Research Team