USD: The Dollar has been able post moderate gains early in today’s session, but has made comparatively little headway with recovering from this week’s Fed-fueled downdraft. Comments by the Chinese Finance Minister that his nation’s growth rate may slip below 7% in the second half of this year provided a modest dose of safehaven support, which is carrying extra weight with the market in front of next week’s Chinese GDP reading. Even so, it remains difficult for the Dollar to overcome the damage sustained from Fed Chairman Bernanke’s dovish comments and from indecisive FOMC meeting minutes. This morning’s PPI and Consumer Sentiment reading should help to reinforce early strength, but the Dollar may have to rely on fresh Fed commentary late in the session in order to finish out a brutal week with any sort of positive tone. The Dollar may climb up towards the 83.40 level after the US data window, and may need additional help from end-of-week short covering to fill in the chart gap left in the wake of this week’s Fed-inspired selloff.
EUR: The September Euro continues to slide further away from yesterday’s spike highs, as Thursday’s late recovery saw little follow through during Asian trading. Once potential risk flare-ups in Greece and Portugal were dampened earlier this week, relative quiet from peripheral EU trouble spots became a key factor with the Euro’s sharp turnaround. This morning’s negative year-on-year reading for Euro zone Industrial Production provided clear evidence that there is plenty of work left to do in order for the Euro to have strong enough economic conditions to sustain a rally back towards the mid-June highs. With Chinese GDP data casting a long shadow over global markets, and with peripheral EU debt yields back on the rise, the Euro is likely to remain squarely on the defensive to finish out this week. The September Euro could fall back towards the 130.15 level later today, but may require fairly strong US data this morning in order to fill in this week’s gap on the charts.
GBP: The September Pound finally was able to hold onto upside momentum during yesterday’s session, only to take a decisive turn back to the downside early this morning. Now that new BOE Governor Carney is on board and easing expectations have been ramped up by post-BOE meeting comments earlier this month, the Pound will need to see definitively positive UK economic readings to avoid a retest of this week’s lows during the near future. The September Pound should find support just under the 151.00 level later in today’s session, and is likely to sink further towards the middle of this week’s trading range by the close.
JPY: The September Yen has consolidated near the 101.00 level this morning, and appears to have lost upside momentum after a tumultuous week of trading. Comments by the Chinese Finance Minister about his nation’s lower growth rates have provided a fresh source of safe-haven support to the Yen this morning, and with Chinese GDP data coming out early next week that may help to keep prices fairly well supported going into the weekend. While the BOJ upgraded their outlook for the Japanese economy, a 2% inflation target by 2015 continues to hang over the market. In addition, the Yen is unlikely to hold onto flight-to-safety support once next week’s Chinese data has been digested by the market. The September Yen may see a late-week rally to the 101.25 area during today’s trading, which will provide an opportunity to enter the short side of the market.
CHF: The September Swiss is finding early headwinds, but for the moment remains in the upper portion of a sizable weekly trading range this morning. With recent Swiss economic data starting to lose its competitive advantage to its Euro zone neighbors, the Swiss Franc will find it difficult to extend this week’s sharp rebound. The September Swiss will find near-term support around the 105.15 level this morning, and is likely to remain under pressure through the close of this week’s trading.
CAD: The September Canadian remains in a fairly tight trading range this morning, but has stayed well clear of the late June/early July trading range late this week. Although energy prices have fallen back from this week’s highs, a very positive tone from this week’s Canadian housing data should keep the Canadian Dollar well supported going into the weekend. The September Canadian may rise up towards the 96.45 level later today, but further gains may be held in check due to sluggish energy prices, as well as the potential for disappointing Chinese GDP numbers early next week.