USD: The Dollar is finding mild pressure early, but has given back little of the sizable gains posted during the past two days. Calmer global markets after their post-FOMC meeting turbulence have drained some of the Dollar’s underlying safe-haven support, although there is plenty of underlying anxiety after this week’s events to keep the Dollar fairly well supported at these current levels. There will be no US economic data this morning that could potentially derail Dollar sentiment, which will continue to benefit from the Fed’s rather direct tapering rhetoric earlier this week. With negative vibes coming from China and Greece providing a modest safe-haven boost early in today’s session as well, the Dollar looks to be on-track for posting a sizable weekly reversal at today’s close. The Dollar may head down towards support at 81.85.
EUR: The September Euro was able to put together a moderate recovery rally this morning, but remains far below the 4-month highs posted earlier this week. This morning’s calmer global markets have helped to dampen peripheral EU debt yields, which have provided some measure of support to the Euro after its downdraft over the previous two sessions. There may be some trouble on the horizon, however, as the IMF’s threat to cut off aid to Greece and the potential collapse of that nation’s coalition government may provide a fresh dose of Euro zone anxiety to the market. The Euro should hold onto early strength through the end of this week’s trading, but remains vulnerable to another sharp downside move if peripheral EU problems start to flare up once again. The September Euro may rise up towards resistance at 132.45.
GBP: The September Pound is having trouble holding onto early gains this morning, and has slid back towards unchanged levels coming into today’s trading. A lower than expected reading for UK Public Sector Borrowing will help to reinforce ideas that the Bank of England will hold off on fresh easing measures over the near future, but outside markets may need to have a stronger tone in order for the Pound to revive upside momentum. The September Pound may climb back above the 155.00 level.
JPY: The September Yen has made a sizable rebound from below the 102.00 level for the second straight session, but remains firmly in negative territory heading into this morning’s trading. A 1.66% gain for the Nikkei will mean that key Japanese stock index will finish higher for the week, which given its recent severe pullback will continue to erode the Yen’s safe-haven support. While China and several Asian emerging markets are generating plenty of market anxiety after this week’s events, it appears that the Dollar has overtaken the Yen to become the flight-to-safety destination of choice for now. End-of-quarter position squaring is likely to continue the Yen’s recent volatility but as long as global equities are on the mend, the Yen is likely to remain on the defensive. The September Yen could make one more retest of the 102.00 level later on in the session, and looks to be heading back to the downside over the next few weeks.
CHF: The September Swiss was unable to make any more than a modest follow-through to yesterday’s sizable reversal, and has fallen back towards unchanged levels coming into this morning’s trading. Smoldering problems with Greece and with emerging markets have provided the Swiss Franc with a moderate boost of safe-haven support late this week, but SNB officials made it fairly clear at yesterday’s meeting that they will have little tolerance for any sustained strength in their currency. The September Swiss may rise up towards resistance at 108.20.
CAD: The September Canadian has avoided posting a new low for the move this morning, but is showing little inclination for recovering any sizable portion of this week’s heavy losses. This morning’s Canadian CPI and Canadian Retail Sales data may reinforce early gains, but the Canadian Dollar needs to see a strong recovery in energy and metals markets in order to lift well clear of these recent lows. The September Canadian may rise up towards 96.36 resistance.