USD: The Dollar has once again been able to shake off early pressure, but is still having some trouble with rising clear of this week’s consolidation trading pattern. Yesterday’s set of better-than- expected US data helped to revive Dollar sentiment, not only by lifting Fed tapering expectations but by also fueling a surge in US longer-term yields as well. Although this week’s Chinese “flash” PMI data has rattled global markets, safe-haven support is unlikely to be a front-and-center issue for the Dollar late this week. This will put additional emphasis on this morning’s Jobless Claims and Durable Goods readings, as continued positive results from “top-tier” numbers will provide the Dollar with its strongest hope of sustaining upside momentum. The Dollar may rise up towards the 82.62 level after today’s US data window, and should continue to make progress with repairing recent chart damage over the rest of this week’s trading.
EUR: The September Euro made an early attempt to retest yesterday’s weekly highs, but saw an abrupt change of fortune and is finding moderate pressure this morning. Today’s German IFO survey showed an incremental gain, but was well below the magnitude of yesterday’s “flash” PMI increases across the Euro zone, which caused a swift downdraft in the Euro this morning. Sentiment readings have been one of the few generally positive categories for Euro zone data, which will need to see broad-based improvement with economic readings across the region to offset the ECB’s shift towards accommodative monetary policy. Subdued peripheral EU debt yields will help to support the Euro in close proximity to the recent highs, but only as long as EU news headlines remain subdued as well. The September Euro may find near-term support around the 131.58 level, and will need to receive better news than a Spanish Unemployment decline to 26.3% in order to revive this month’s recovery rally.
GBP: The September Pound posted an early high above the 153.80 level for a fourth straight session, but has plunged more than 1 cent lower in the past few hours and is posting sizable early losses this morning. Today’s UK GDP numbers were in-line with market forecasts but did not match the strength and positive tone of recent UK data. With the market unable to climb past the 153.87 weekly high yet again, the Pound is likely to see additional long liquidation and profit-taking during today’s session. The September Pound should find decent support around the 152.50 area this morning, but with this early turnaround is likely to remain on the defensive through the rest of today’s session.
JPY: The September Yen was able to rebound from early pressure, and appears to have held off a decisive move below the 100.00 level once again. Sluggish equity markets both inside and outside Japan are providing the Yen with a fresh source of flight-to-safety support, and has offset the lack of strength from recent Japanese economic readings. Safe-haven support will only take the Yen so far to the upside, however, as there is plenty of Japanese monetary and fiscal stimulus on both the near-term and longer-term horizons. The Yen is likely to fall back into negative territory once today’s US data is digested by the market, and looks to be headed down to much lower prices levels over the coming weeks. The September Yen may slide down towards the 99.82 area later today, and will need to see a stronger sense of risk anxiety in global markets in order to climb back towards this week’s early highs.
CHF: The September Swiss has been caught up in the Euro’s negative turnaround this morning, and has given up early strength to slide into negative territory early this morning. The SNB’s latest monthly statistical bulletin showed that the Swiss Franc was overvalued by 11% during June, which will give officials further incentive to keep their 1.20 floor rate with Euro in place in spite of reduced risk anxiety from that region. The September Swiss may find support around the 106.35 level later this morning, and will need to see a turnaround in global risk sentiment in order to regain the upside momentum seen earlier this week.
CAD: The September Canadian is grinding out a modest gain this morning, but will have some work to do in order to recover from yesterday’s reversal from a 5-week high. Sluggish energy and metals prices have created some early headwinds, but the positive shift in tone of recent Canadian economic data should help to keep the Canadian Dollar fairly well supported in close proximity to the recent highs. The September Canadian may climb back towards the 97.12 area later today, but will need to see stronger outside markets in order to take this current up move into new high ground.