USD: The Dollar has bounced back from early pressure and is posting modest gains this morning, although the market is showing little of the strength seen at the end of last week’s trading. A robust Consumer Credit reading late yesterday provided further evidence of a growing US economy, but a lack of “top-tier” data this morning may leave the Dollar focusing more on overseas issues. Last night’s Chinese inflation numbers were inline to slightly better than forecasts, which removed a potential stumbling block for global markets as well as a possible fresh source of safe-haven support for the Dollar. With Euro zone risk anxiety subdued and with no major Fed dialogue until tomorrow’s FOMC meeting minutes, the Dollar may have trouble finding enough strength to retest last Friday’s high for the move. The Dollar may climb up towards the 84.65 level later in today’s session, however, and will remain fairly well supported as long as Fed tapering ideas are unable to be squelched by weak US data or dovish official rhetoric. The Commitments of Traders Futures and Options report as of July 2nd for US Dollar showed Non-Commercial traders were net long 15,604 contracts, an increase of 3,371 contracts. The Commercial traders were net short 21,480 contracts, an increase of 3,988 contracts. The Non-reportable traders were net long 5,876 contracts, an increase of 617 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 21,480 contracts. This represents an increase of 3,988 contracts in the net long position held by these traders.
EUR: The September Euro made a modest extension to yesterday’s relief rally, but has already lost upside momentum and has fallen back into negative territory this morning. Greece’s new aid agreement has calmed down peripheral EU risk anxiety, but appears to be kicking the can down the road till later on this year. Recent Euro zone economic readings have been lukewarm at best, which has kept last week’s ECB post-meeting rhetoric front-and-center with the market. While a potential risk flare-up may have been avoided for now, the Euro will be dragged back to the downside by sluggish economic conditions and an accommodative ECB policy outlook going forward. The September Euro should find near-term support around the 128.55 level, but looks to be heading towards a retest of the 2013 low at 127.70 over the near future. The Commitments of Traders Futures and Options report as of July 2nd for Euro showed Non-Commercial traders were net short 12,223 contracts, an increase of 31,271 contracts which represents a change from a net long to net short position. The Commercial traders were net long 23,017 contracts, an increase of 40,287 contracts which represents a change from a net short to net long position. The Non-reportable traders were net short 10,794 contracts, an increase of 9,016 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 23,017 contracts. These traders have gone from a net long to a net short position.
GBP: The September Pound was making headway with this week’s recovery, but turned sharply lower this morning and has already reached a new low for the down move this morning. Today’s UK Industrial and Manufacturing Output numbers were much worse than expected, and have put fresh Bank of England easing measure firmly back on the table. Unless there is a drastic change in sentiment, the Pound is likely to fall further into new low ground through the end of this week. The September Pound may find near-term support around the 148.30 area, and will looking towards outside markets to help put the brakes on this current sell off.
JPY: The September Yen has resumed its longer-term downtrend this morning, as yesterday’s rebound ran out of steam during the overnight session. The Nikkei and TOPIX stock indices have now reached their highest price levels since May 24th, which has removed a large portion of recent underlying support for the Yen. Last night’s Chinese inflation data avoided any negative surprises, which has helped to dampen the Yen’s safe-haven support as well. With tomorrow night’s Bank of Japan meeting already casting a long shadow over the market, the Yen is likely to remain squarely on the defensive during today’s trading session. The September Yen may find support around the 98.58 level this morning, but may be able to avoid sliding down to a new monthly low until the BOJ is heard from later on this week.
CHF: The September Swiss slid to another new low for the move early this morning, and is showing few signs of pulling out of this current downdraft. With lower EU risk concerns already applying pressure, the weaker than expected reading on Swiss Retail Sales result is likely to keep the Swiss Franc heading further to the downside during today’s trading session. The September Swiss may find support around the 103.10 level later this morning, and remains vulnerable to a sharp sell off that could take prices down to a new 2013 low.
CAD: The September Canadian is showing modest strength this morning, and is still having trouble lifting well clear of last Friday’s spike lows early this week. Today’s Canadian Housing data will play a critical role in whether this rebound can gain further momentum, as energy and metals prices have provided little in the way of carryover support recently. The September Canadian may rise up towards the 94.78 level this morning, and may be showing some early signs of lifting clear of this current trading range.