USD: The Dollar is finding moderate pressure this morning but has held onto a sizable portion of yesterday’s sharp recovery rally in front of today’s trading session. While a decent set of Jobless Claims numbers provided a badly-needed “good” US economic number, the main source of near-term Dollar strength has come from the post-ECB meeting nosedive in the Euro. Today’s main event, the Employment Situation report, will clearly determine whether the Dollar can regain further ground going into the weekend. Given the lukewarm tone of recent US data, the Dollar may require a Non-Farm Payroll number well above the +160,000 level in order to regain upside momentum. If there is another disappointment of the magnitude of last month’s data, the Dollar could be heading for a swift retest of this week’s lows. The Dollar should find support around the 81.93 level before today’s data, and then it will hope for a Non-Farm Payroll number than can at least match up to market expectations to stay well clear of the recent lows.
EUR: The June Euro was able to make a fairly healthy recovery this morning, but it is still feeling the aftereffects of yesterday’s post-ECB meeting rhetoric. Two key ECB officials have “walked back” President Draghi’s comments on negative deposit rates, which has provided some clear relief to the Euro. Yesterday’s rate cut has helped to keep peripheral EU debt yields at fairly low levels, which is also fueling this morning’s rebound. Along with the Yen, the Euro may have the most to lose from a positive reception to today’s US jobs data, as there have few examples of “good” Euro zone data over the past few weeks. The June Euro may rise up towards the 131.45 area before today’s US data and would need to see disappointing numbers from this side of the Atlantic to climb back towards this week’s highs.
GBP: The June Pound was unable to benefit from this morning’s positive reading on UK Service Industries, as prices have consolidated within a fairly tight trading range this morning. While the positive tone of recent UK economic data should keep the Pound relatively well supported, it is unlikely that prices will be able to take out this week’s highs for the move, even if today’s US Non-Farm Payroll number throws up another shocking miss. The June Pound may rise up towards the 155.64 area in front of the US data and is likely to finish out this week in close proximity to the recent highs
JPY: The June Yen was fairly subdued during overnight trading but made little headway in recovering from yesterday’s selloff. Although the ECB meeting aftermath “should” have provided a fresh boost of safe-haven support, it took one set of decent US data to divert flight-to-safety flows right back into Dollars. The Yen has been unable to sustain any recovery rally throughout this longer-term downtrend, so any rebound due to weak US data is unlikely to reach beyond this week’s highs. However, any positive reception for this morning’s Payroll numbers should result in a retest of the April lows for the move during the next few sessions. The June Yen will find support near the 101.65 area while remaining on the defensive going into this morning’s US data, and it will need to see a weak Non-Farm Payroll reading to avoid dropping down to the recent lows.
CHF: The June Swiss has regained upside momentum this morning, although gains have been limited as prices have started to calm down after several week of unusual volatility. Although the Swiss Franc will likely come back under pressure from positive US data, comparative strength with their own economic data versus the Euro zone should help to keep prices underpinned above their 200-day moving average. The June Swiss will find support early this morning around the 107.15 level and would be another beneficiary of a weak set of US jobs numbers later this morning.
CAD: The June Canadian came under severe pressure during overnight trading but has put together a modest recovery coming into this morning’s session. The selection of Stephen Poloz to be the new Bank of Canada Governor negatively impacted the Canadian Dollar, not only from the surprise factor, but also from expectations that his recent term as head of Canada’s Export Financing Agency will have him lean towards the “dovish” side of monetary policy. There will be no Canadian jobs data to digest this morning, but the Canadian Dollar will have a chance to regain additional lost ground if US jobs numbers can beat expectations. The June Canadian could climb up towards the 98.90 level this morning and take overall direction from the tone of today’s US Payroll numbers.