USD: The Dollar could not sustain an overnight rebound, and has now fallen to a fresh 4-week low coming into this morning’s session. While most of yesterday’s US data points were fairly close to market expectations, it was one surprisingly weak number – the ADP Employment survey – that continues to weigh on the Dollar this morning as the prospects for Fed tapering of asset purchases are focusing more and more on tomorrow’s US jobs data. Japanese equities appear to be calming down, which will reduce one source of pressure on the Dollar early today. However, the likelihood of steady central bank activity across the Atlantic today will require that the Dollar needs to see decent Jobless Claims numbers later this morning in order to put some brakes on this current downdraft. The Dollar may be able to bounce back towards the 82.68 area with decent Jobless Clams data this morning, but at this point will clearly need to wait for – and receive – some definitively positive US Employment results tomorrow morning to fully regain upside momentum.
EUR: The June Euro continues to build onto this current recovery rally, and has now reached the highest price levels since early May. While a large portion of recent Euro zone economic data remains soft, such as today’s uptick with French Unemployment, there have been few of the shocking “misses” that have throttled Dollar sentiment during the past few weeks. With that in mind, there is little likelihood that the European Central Bank will step up with fresh easing measures at today’s meeting. The key event of the day may be ECB President Draghi’s post-meeting comments, however, which are unlikely to make for pleasant listening and may very well drive the Euro back into negative territory later on in the session. The June Euro should find near-term support around the 130.70 area if the post-ECB meeting news conference develops a negative tone, but should remain in close proximity to the recent highs going into tomorrow’s US Employment numbers.
GBP: The June Pound remains very strong this morning, and now has risen more than 41/2 cents above last week’s lows in front of today’s Bank of England meeting. The recent positive shift in UK economic data – particularly with the “clean sweep” in PMI numbers this week – may have not only taken potential QE measures off the table at today’s meeting, they may have pushed them well into the future. The June Pound may fall back towards the 154.26 area after this morning’s central bank results and US data points are heard from, but should remain fairly well supported throughout the balance of today’s trading session.
JPY: The June Yen has come through another bumpy night of trading with a mildly positive tone, but clearly does not have the strong upside momentum seen during yesterday morning’s trading. The Japanese Nikkei index “only” had a 0.8% decline last night, and has dropped more than 17% in a little more than 2 weeks, but at least avoided another large-scale downdraft that has recently boosted the Yen’s safe-haven support. Media reports of disunity at the BOJ in regards to dampening volatility in JGB yields have also been a positive for the Yen, but it is unlikely that their vow of “aggressive” easing measures will ease up this soon after new BOJ Governor Kuroda came into office. With deflation still hanging over Japanese financial markets, the Yen will see safe-haven support quickly erode if and when Japanese equities can stabilize. The June Yen could fall back towards the 100.62 area with a positive reception for US data later today, but any attempt to slide back below the key 100.00 level may have to wait until Japanese equities show signs of putting in a near-term bottom.
CHF: The June Swiss was able to post a new high for the move early today, but has since lost upside momentum and has fallen back towards unchanged levels. Today’s Swiss CPI number was in-line with forecasts but showed a negative year-on-year reading, which will provide the SNB will additional incentive to keep their current floor rate with the Euro firmly in place going forward. The June Swiss may fall back towards the 106.08 level later in today’s session, but should start to regain lost ground versus the Euro after the market has a chance to digest ECB President Draghi’s post-meeting comments.
CAD: The June Canadian was able to shake off overnight pressure, and is posting solid gains coming into this morning’s session. Today’s Ivey PMI survey should help to reinforce the Canadian Dollar’s early strength, but any large-scale move up and beyond this recent trading range will certainly have to wait until tomorrow’s always volatile Canadian jobs data is heard from. The June Canadian may rise up towards the 97.08 level later on this morning, and should hold onto its positive tone even if today’s US Jobless Claims exceed market forecasts.