USD: The Dollar has put together a moderate recovery rally this morning, but still has some work to do after a sizable downside breakout took prices well below their mid-to-late May trading range. Yesterday’s US data may not have been that disappointing from a recent perspective, but was clearly well below the strength needed for the Dollar to regain any sustainable upside momentum. A glut of overseas economic numbers during overnight trading has helped the Dollar stay well clear of yesterday’s lows, but ongoing Yen strength is still providing plenty of headwinds this morning. Today’s Personal Income number and a private survey of Consumer Sentiment may not be of the magnitude of next week’s Payroll data, but at this point will need to produce some well-received results in order for the Dollar to finish out this week with a positive tone. The Dollar may rebound back to the 83.52 level with decent US data, but may require the additional help of fresh overseas risk anxiety in order to climb back into the recent trading range.
EUR: The June Euro could not sustain yesterday’s strong upside move for more than 24 hours, and appears to be heading well below the key 130.00 level later in today’s session. A sluggish set of economic numbers from around the Euro zone, highlighted by another record high for Euro zone Unemployment, has clearly dampened market sentiment heading into the weekend. Comments by an Italian central bank official that the ECB may be ready to cut their benchmark deposit rates again are also casting a long shadow over the market. At this point, the Euro may need a revival of global market risk sentiment to offset the impact of today’s lackluster data from the EU. The June Euro may slide down towards the 128.54 area later on during today’s trading, and at this point will need to hear some positive news and/or official commentary from inside the Euro zone in order to put the brakes on this morning’s downdraft.
GBP: The June Pound failed to follow-through on an early move to a new weekly high, but is holding up fairly well given the headwinds coming from the Euro zone this morning. While a private survey of UK consumer confidence provided an overnight boost to the Pound, much further and consistent strength from upcoming UK economic data will be needed to fully overcome recent hints of fresh BOE easing measures on the near-term horizon. The June Pound could slide back towards the 151.62 level later this morning, but will finish out this session in much better shape than was seen at the 2-month lows posted earlier this week.
JPY: The June Yen continues to be fairly well-supported this morning, and reached a fresh 3-week high before losing upside momentum during the past few hours. Last night’s large set of Japanese economic data provided the market with several positive highlights, particularly with Industrial Output and Housing, which has given the Yen plenty of early strength. Lost in the shuffle was yet another poor reading for Japanese national CPI, the eleventh straight month that number has shown a negative year-on-year result. With the Bank of Japan’s 2% inflation target still looming over the market, aggressive easing measures are unlikely to be going away anytime soon. End of month short-covering will also provide support this morning, but it will be difficult for the Yen to see any large-scale extension to this current upmove without global risk sentiment turning decisively negative. The June Yen could make one more run up to the 99.75 level later in today’s session, but calmer Japanese equity markets may be an early sign that the Yen’s longer-term downtrend could resume during the next few sessions.
CHF: The June Swiss was able to reach a fresh high for the move this morning, but carryover pressure from sluggish Euro zone data has dragged the market back into negative territory. A decent reading from the KOF leading economic indicator earlier today should keep the Swiss Franc well supported versus the Euro, but a resumption of this week’s rally may require stronger risk appetites from both inside and outside Europe. The June Swiss may fall back towards the 104.45 area later this morning, but should finish out this week well above its recent trading range.
CAD: The June Canadian has given back a large portion of yesterday’s sizable gains, and is coming into this morning’s session squarely on the defensive. “Commodity” currencies such as the Canadian Dollar have come under severe pressure due to today’s Yen strength, which is fueling an end-of-month liquidation wave of “carry” trades. Today’s Canadian GDP number will need to exceed market expectations for the Canadian Dollar to overcome this morning’s early pressure. The June Canadian should find decent support around the 96.34 level early in today’s trading, and should benefit from a positive reception from data from both sides of the US/Canada border later this morning.