USD: The Dollar has generally held its ground after yesterday’s sharp recovery rally, but will need to get past this morning’s US jobs data in order to climb further to the upside. The Fed’s emphasis on low US inflation levels with this week’s FOMC post-meeting statement may have diminished Fed tapering prospects, but strong readings with the ADP private jobs survey and yesterday’s multi-year low in Initial Jobless Claims have clearly raised hope that improvement with the Fed’s other main tapering gauge – lower Unemployment – may provoke them into action by the market’s September threshold. This week’s data has ramped up Non-Farm “whisper” numbers into the 200,000 plus range, so there is clearly some room for disappointment if today’s readings fall short of expectations. If today’s US jobs numbers can avoid any negative surprises, however, the Dollar should be able to build on this current rebound and finish with a healthy weekly gain as well as a weekly reversal. The Dollar may climb up towards the 82.56 area coming into the US jobs data window, and will clearly take direction from how the market feels that those data supports the case for near-term Fed tapering.
EUR: The September Euro was able to bounce from an early retest of yesterday’s lows, but is showing little inclination for a late-week recovery so far this morning. Yesterday’s post-meeting comments by ECB President Draghi were short on specifics as well as fresh details, but left little doubt that the ECB will remain in an accommodative stance over the near future. While this week’s Euro zone PMI data showed some modest improvement, there is a clear gap between the near-term growth prospects for the US and Europe. Any set of US jobs data that is in-line or above forecasts will reinforce that gap, and should put additional pressure on the Euro going into the weekend. The September Euro may find near-term support around the 131.88 level this morning, and may require some lukewarm US jobs numbers in order to avoid a late-week selloff.
GBP: The September Pound initially made a new 2-week low last night, and then made a rapid turnaround this morning when the UK Construction PMI reading came in much better than market expectations. While recent strength in UK economic data played a major role with keeping the Bank of England from shifting further into an accommodative stance at yesterday’s meeting, the market may need to get past next week’s Quarterly Inflation Report before the Pound can fully recover from recent chart damage. The September Pound may find support around the 151.20 level this morning, and stands a good chance of avoiding a new low for the move even if today’s US jobs data does exceeds market forecasts.
JPY: The September Yen continues to slide further away from this week’s highs this morning, and may be in danger of making a sizable move back below the 100.00 level with any sort of positive reception for US jobs data later today. Relief with this week’s Chinese PMI data as well as strength in recent US economic numbers has led to a significant flow in flight-to-safety support across the Pacific and into Dollars. Japanese equities had their second large daily gain in as many sessions, which is putting the Yen even further on the defensive this morning. With the BOJ’s aggressive easing measures still casting a long shadow over the market, the Yen will need to see some fairly weak US jobs data to regain the strong upside momentum seen earlier this week. The September Yen may find support around the 100.05 area in front of today’s numbers, but any sign of strength from the US labor front is likely to send prices down towards the mid-July lows in a hurry.
CHF: The September Swiss is finding mild pressure this morning, and has been able to recover from a new weekly and monthly low during the overnight session. This morning’s Swiss PMI reading rose to a new 2-year high, but is unlikely to prevent another retest of the overnight lows if US jobs data can at least match market expectations. The September Swiss should find support just below the 106.50 level later this morning, but will need help from outside markets and improving risk sentiment in order to regain any large portion of its late-week downdraft.
CAD: The September Canadian continues to plunge further away from Wednesday’s high for the move, and is coming into this morning’s trading squarely on the defensive. With little help from sluggish energy and metals prices early today, and with no Canadian jobs numbers this morning to match against US data, the Canadian Dollar is likely to find additional pressure if today’s Non-Farm Payroll reading can exceed market forecasts. The September Canadian may find near-term support just above the 96.00 level, and will need to see a definitive “risk on” mood in global markets to put the brakes on this current selloff.