USD: The Dollar has found its footing after a subdued overnight session, but is still lacking enough upside momentum to climb up beyond last week’s highs and into new high ground. Yesterday’s US data may have had positive headline readings, but weak sub-components and negative revisions offset any lasting benefit for the Dollar. With only a Factory Orders number and readings on auto and same-store sales for the market to digest, the Dollar may have problems finding fresh domestic strength to fuel any extended upside run. Overseas risk anxiety is starting to become a “front-and-center” issue with the market early in today’s session, however, which should keep the Dollar in close proximity to these recent highs. The Dollar may climb up towards the 83.53 level if today’s US data exceeds expectations but with Friday’s jobs numbers already casting a long shadow over the market, the Dollar will require additional safe-haven support to reach a fresh 1-month high later today.
EUR: The September Euro was unable to sustain this week’s rebound from more than one session, and may be heading for a retest of the key 130.00 level over the next few hours. Negative news headlines from Greece and Portugal have brought peripheral EU debt anxiety back into the market’s focus this morning, and have quickly eroded any benefit from yesterday’s Euro zone data. A weaker than expected Euro zone PPI number earlier today will also give ECB officials another item to think about at Thursday’s meeting. While fresh easing measures may be unlikely this week, there is little chance that the ECB will signal any shift away from their current accommodative monetary policy stance, which is likely to keep the Euro under pressure through the balance of today’s trading. The September Euro will find near-term support around the 130.10 level, with any move through last week’s low likely to find plenty of follow-through selling.
GBP: The September Pound put together a moderate rally during the overnight session, but could not sustain upside momentum and has fallen back towards unchanged levels coming into this morning’s trading. A decent UK Construction PMI number has provided further evidence that the Bank of England will hold off on fresh easing measure at Thursday’s meeting. However, carryover pressure from Euro zone risk anxiety is likely to keep the Pound from lifting clear of these recent lows. The September Pound may find support around the 151.76 area this morning, and at this point may have to wait until the BOE meeting is out of the way in order to climb away from these recent low price levels.
JPY: The September Yen continues to find support just above the 100.00 level this week, as fresh flight-to-safety flows may have put some brakes on a potential downside breakout below that area. With Chinese liquidity issues on the backburner and Asian emerging market currencies on the mend, however, it will be difficult for the Yen to sustain any large recovery from these current price levels. A positive reception for today’s US data will keep the Yen under some pressure, but the market holiday later this week and today’s fresh dose of EU debt anxiety may hold the Yen back from sliding down into new low ground this morning. While the Yen is likely to see a retest of the mid-May lows over the next few weeks, a sharp near-term downside move may require very strong US data later today as well as diminished risk anxiety from the Euro zone and Egypt. The September Yen is likely to find support at the 100.12 overnight lows after the US data window, and should finish out today’s trading firmly at the bottom end of this current downdraft.
CHF: The September Swiss is finding moderate pressure this morning, but is staying clear of yesterday’s low for the move as today’s flare-up of EU risk anxiety has helped it to gain ground on the Euro. While recent Swiss economic data has outperformed their Euro zone neighbors, it will be difficult for the Swiss Franc to shake off pressure from smoldering problems in Greece and Portugal. The September Swiss should find support around the 105.42 level this morning, and remains on-course for reaching a fresh 1-month low later this week.
CAD: The September Canadian remains fairly quiet after yesterday’s Dominion Day holiday, but continues to find little benefit from stronger energy and metals prices and remains on the defensive this morning. This week’s Canadian economic data, starting with today’s PMI reading, will need to show consistent strength in order for the Canadian Dollar to break out above this current trading range. The September Canadian should climb up towards the 95.15 level with positive readings on data from both sides of the US/Canada border, but it needs a vast improvement in sentiment in order to sustain any recovery from these current price levels.