USD: The Dollar is finding moderate pressure this morning and has already reached a fresh 2-month low. Last night’s Chinese PMI number may have been below forecasts but stayed above the 50.0 level, which has dampened the Dollar’s ability to find fresh safe-haven support. Sluggish US economic data continues to erode Dollar strength, as yesterday’s huge Chicago PMI miss more than offset any benefit from a decent Consumer Confidence reading. Today’s ADP Employment data and ISM manufacturing number will carry additional weight with much of Europe closed for a holiday, but the Dollar may have to wait until FOMC meeting results late in the session before gaining strong upside momentum. While there is little chance that the Fed will make any large change to monetary policy, the market will focus on their statements to see if recent sluggish US data causes them to remove language of “tapering” their bond purchases later this year. The Dollar may slide down towards the 81.52 level early in today’s session if risk appetites show further improvement, and then will have a decent chance to regain a sizable portion of recent lost ground if this morning’s US data and the FOMC can provide a fresh boost of confidence in the US economy.
EUR: The June Euro has found moderate support early today and continues to hold onto yesterday’s sharp rally, which has put prices within striking distance of reaching a fresh two-month high later in the session. In spite of fresh sluggish economic data from the region this week and Slovenia’s debt rating cut to “junk” status, the Euro remains well supported in front of tomorrow’s ECB meeting. While there is a growing consensus that the ECB will cut rates tomorrow, it is unlikely that the ECB will start any “unconventional” easing measures such as the QE used by the Fed. There is clearly some relief found in peripheral EU debt yields that problems in Italy and Cyprus have seen near-term resolution, but the prospect of bleak Euro zone PMI numbers tomorrow may help to keep further gains in check during today’s May Day holiday session. The June Euro may climb up towards the 132.18 area this morning, but will be vulnerable to a swift pullback if US data and the Fed can improve sentiment on this side of the Atlantic later today.
GBP: The June Pound continues to drive further into new ground this morning, and has reached the highest price levels since mid-February. A much better than expected reading on UK manufacturing PMI provided another piece of positive economic data that further erodes the case for fresh Bank of England easing measures. The Pound may be unable to sustain early strength if US data and the Fed can revive the Dollar, but prices should remain well supported through the close of today’s trading. The June Pound may rise above the 156.00 level this morning if risk appetites continue to improve, and will need to see some negative news on the UK economy in order to derail this current rally.
JPY: The June Yen made a brief run at yesterday’s high during the overnight session, but has lost upside momentum and slid down into negative territory this morning. Last night’s Chinese PMI number provided the Yen with a fresh boost of safe-haven support, which is due more to the Dollar’s recent weakness than to any substantive changes to the Japanese economy. While there were some positive highlights in yesterday’s sizable Japanese data push, longer-term deflation has seen little improvement and will keep the Bank of Japan firmly on the monetary easing bandwagon for the foreseeable future. If there is continued improvement with global risk appetites today, the Yen will stay well clear of the overnight highs during today’s session. The June Yen should find near-term support around the 102.26 level this morning, and will likely see the strongest negative reaction if the Dollar can be revived by today’s US data and from the FOMC meeting results.
CHF: The June Swiss is posting modest gains this morning but has been unable to take this current rally up into new high ground. With European markets seeing thin holiday trading conditions, the Swiss Franc will continue to lag behind the Euro during today’s session. The June Swiss may climb up towards the 107.94 level later this morning, and will need to see stronger global risk sentiment in order to make a sizable upside extension to this current rally.
CAD: The June Canadian remains firmly within an upward trajectory this morning, and is likely to see a fresh 21/2-month high later on in today’s session. Yesterday’s better than expected Canadian GDP number will provide underlying support, but the Canadian Dollar will benefit from a positive reception for today’s US economic data and FOMC meeting results as well. The June Canadian will have a near-term upside target of 99.52, and is likely to take this current up move further into new high ground by the close of trading.
EasyForexNews Research Team