USD: The Dollar was able to shake off overnight pressure and post a modest gain this morning, although trading has been fairly subdued after last week’s significant volatility. A weak reading on Chinese service industries provided a mild boost of safe-haven support, but the Dollar still remains well below Friday’s post-Payroll highs. The Dollar continues to have problems with mixed US economic data, as sluggish readings from Factory Orders and non-Manufacturing ISM dampened sentiment going into the weekend. A lack of fresh US data this morning and quiet holiday markets in London will make it difficult for the Dollar to fully regain upside momentum, although there will be more than enough residual benefit from last Friday’s jobs data to keep the Dollar well supported at these levels. The Dollar may build on early gains and rise up towards the 82.38 area later this morning, and should maintain a positive tone through the balance of today’s trading session. The Commitments of Traders Futures and Options report as of April 30th for US Dollar showed Non-Commercial traders were net long 35,210 contracts, a decrease of 2,904 contracts. The Commercial traders were net short 42,262 contracts, a decrease of 4,049 contracts. The Non-reportable traders were net long 7,052 contracts, a decrease of 1,145 contracts. Non-Commercial and Non- Reportable combined traders held a net long position of 42,262 contracts. This represents a decrease of 4,049 contracts in the net long position held by these traders.
EUR: The June Euro was unable to sustain moderate early gains and has slipped back towards unchanged levels this morning. A mildly better than expected set of Service PMI numbers from throughout the Euro zone were all well short of the key 50.0 level, while a negative year-on-year reading for Euro zone Retail Sales appears to have been taken in stride by the market. While ECB officials and Euro zone leaders continue to give out mixed signals, last week’s rate cut and caustic post-meeting rhetoric are going to weigh on the Euro going forward. As long as fresh peripheral EU problems do not flare up early this week, the Euro should be able to consolidate in the middle portion of last week’s trading range. The June Euro may fall back towards the 130.84 area during today’s trading, and will need to see some definitively positive news from the region in order to retest the pre-ECB meeting highs anytime soon. The Commitments of Traders Futures and Options report as of April 30th for Euro showed Non-Commercial traders were net short 30,394 contracts, a decrease of 3,948 contracts. The Commercial traders were net long 39,377 contracts, a decrease of 12,020 contracts. The Non-reportable traders were net short 8,983 contracts, a decrease of 8,072 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 39,377 contracts. This represents a decrease of 12,020 contracts in the net short position held by these traders.
GBP: The June Pound failed to move up and beyond the 156.00 level for a fourth straight session, and has slumped all the way back into negative territory early this morning. Today’s UK holiday is likely a major factor with sluggish upside momentum this morning, but the uptick with recent UK economic data should help to keep the Pound well supported in front of this week’s Bank of England meeting. The June Pound may extend today’s pullback to the 155.36 level later in today’s session, but should remain in close proximity to the recent highs early in this week’s trading.
JPY: The June Yen has been on the defensive throughout the overnight trading, and is once again coming towards a retest of the 100 per Dollar level. While there were some pieces of positive Japanese economic data last week, a strong showing with last Friday’s Payroll data will likely send any fresh safe-haven support heading towards Dollars instead of the Yen. This will be the third time in the past month that the Yen has fallen down to these price levels, only to run into firm support that has kept prices from reaching new low ground. The Yen may need a catalyst event to break out below the early and mid-April lows, but is likely to remain under pressure throughout today’s session. The June Yen may find near-term support around the 100.50 level later today, but a further slide down to new lows may be a difficult task during today’s quiet markets.
CHF: The June Swiss could not extend an early move back above its 200-day moving average, and is finding moderate pressure this morning. Comments over the weekend by a key SNB official hinting at further steps to weaken their currency if the Euro zone crisis intensifies, has been a major factor with the Swiss Franc losing ground with the Euro this morning. The June Swiss may fall back towards the 106.52 area later in today’s session, but should find more than enough underlying strength to avoid a retest of last Friday’s lows this morning.
CAD: The June Canadian has found little benefit from stronger energy and metals prices at the start of this week, but continues to hold onto a sizable portion of last Friday’s significant rebound. Recent strength with economic data from both sides of the US/Canada border should help to support the Canadian Dollar near the recent highs, but there may still be some residual anxiety in the market concerning the appointment of Stephen Poloz as new BOC Governor. The June Canadian should bounce back and retest the 99.20 overnight high, but is likely to remain well below last week’s highs for the move until the market has more confidence that the Bank of Canada will not shift towards easier monetary policy after new BOC Governor Poloz takes charge.