USD: The Dollar has taken a negative turn over the past few hours and is posting moderate losses coming into this morning’s trading session. Yesterday’s news of a credit rating agency’s upgrade of US debt has not provided much in the way of lasting support, as overseas factors have put the Dollar squarely back on the defensive early this morning. There are no “top-tier” US data releases to reinforce an improving tone for the US economy, so today’s headwinds from across the Pacific may prove to be too difficult for the Dollar to overcome. Unless there is a fresh surge of safe-haven support, the Dollar is likely to remain firmly within negative territory today. The Dollar should find support around 81.35.
EUR: The June Euro is finding moderate strength this morning, but could not sustain a rally above the 133.00 level. The Euro has benefited from the market’s focus on other regions of the globe, but there may be trouble brewing on the near-term horizon. Germany’s Constitutional Court will hear arguments this week on the legality of the ECB’s bond buying program, which could dampen sentiment if they are badly received by the market. While global risk sentiment has been eroding during overnight trading, the Euro should hold its ground and will remain fairly well supported. The June Euro could make another run at the 133.00 level if global markets calm.
GBP: The June Pound remains under pressure this morning, although prices have been able to consolidate near the middle of their post-BOE meeting trading range. While this morning’s UK Industrial Output data was roughly in-line with market forecasts, the negative tone from outside markets is clearly weighing on the Pound this morning. The June Pound may find support around 155.18.
JPY: The June Yen has driven sharply to the upside, and is posting huge gains this morning. The Bank of Japan surprised few traders by making no changes to monetary policy at last night’s meeting, but many in the market were disappointed that the BOJ took no steps to diminish recent volatility in JGB yields. Japanese equities did not take the news well, as their large post-meeting slide provided fresh safe-haven fuel for the Yen. While shortcovering may add further strength to today’s rally, the Yen may need to see fresh risk anxiety from outside of Japan in order to bounce. Any sense that Japanese financial markets are starting to stabilize, and the Yen’s nearterm strength will evaporate quickly. The June Yen may climb back toward 103.45.
CHF: The June Swiss was able to find fresh flight-to-safety support from the Yen’s updraft and the German Constitutional Court proceedings, and has risen within striking distance of last week’s highs. A SNB official came out and defended the Swiss/Euro floor rate mechanism this week while also stating that Swiss inflation levels would rise by the end of this year, which is in contrast to today’s Swiss government forecast that inflation would be at negative levels during 2013. The June Swiss may rise up towards the 108.10 level later today, but is starting to show signs of being a little top-heavy at these current price levels.
CAD: The June Canadian came under significant pressure late in Asian trading and has fallen well below the recent highs this morning. While fairly strong readings on jobs and housing have helped to provide underlying support, sluggish energy and metals prices are likely to weigh on the Canadian Dollar today. The June Canadian may fall back towards 97.50.