USD: The Dollar has once again come into a morning trading session under moderate pressure, but is managing to remain inside of this week’s trading range in spite of some choppy intra-day price action. Stronger than expected Chinese trade numbers, both on exports and imports, have helped to soothe market anxiety over global economic slowing and that may have eroded a portion of the Dollar’s residual safe-haven support. There has been little in the way of positive US economic data for the market to digest over the last 24 hours, as the Consumer Credit number was slightly disappointing. While last week’s strong Payroll numbers continue to provide strength, improving risk appetites around the global are likely to keep the Dollar on the defensive through today’s trading session. The Dollar will find near-term support around the 82.04 level, and will continue to take most of its direction from overseas risk developments.
EUR: The June Euro was able to put together decent gains during the overnight session, but has been unable to break free of a post-ECB meeting consolidation price zone on both sides of the 131.00 level. Once again, it has been a surprisingly strong piece of German economic data that has boosted the Euro coming into this morning’s trading session. While there have been few recent economic data highlights from the region that have come from outside of Germany, last week’s ECB rate cut is clearly helping to keep peripheral EU debt yields subdued. This week’s well-received Portuguese debt auction has been seen by many traders as evidence of diminished Euro zone risk concerns, which have more than offset strong hints of upcoming ECB easing action. The June Euro may extend today’s rally up to the 131.64 level, but will likely need to see some decent non-German economic data from the Euro zone in order to climb back towards the pre-ECB meeting highs.
GBP: The June Pound is also finding moderate carryover support in the wake of the German Industrial Production number, but remains well below the 156.00 resistance level that was difficult to break through earlier this month. Tomorrow’s Bank of England meeting may help to keep further gains in check this morning, as recent easing moves from other major central banks may have cast some fresh doubt that the BOE will remain on the sidelines. The June Pound may rise up towards the 155.24 area later in the session, but will need to get past the BOE meeting and find a stronger tone from outside markets in order to retest the recent highs.
JPY: The June Yen has stubbornly avoided a retest of the April lows this week, and is holding close to unchanged levels early in today’s trading session. While global risk appetites have been on the mend, the Yen has not seen the erosion of safe-haven support that the Dollar has sustained early this week. Talk of solid support around this week’s lows may have spooked Yen shorts, which have also seen little in the way of fresh news or economic data from either side of the Pacific during the past few sessions. Although a catalyst event may still be required to send the Yen down into new low ground, the lack of any upside follow-through indicates that these current price levels remain a good point to approach the short side of the market. The June Yen may bounce back towards the 101.25 area later today, which would provide a fresh opportunity to put on long put option strategies.
CHF: The June Swiss could not sustain two attempts to rally during the past few hours, and has slipped back towards unchanged levels this morning. Today’s Swiss CPI reading continued to be negative on a year-to-year basis, which has provided fresh evidence of deflation and will keep the SNB firmly committed to their current floor rate strategy versus the Euro. The June Swiss should find more than enough carryover support from today’s German data to maintain a mildly positive tone, but may need to see stronger global risk sentiment in order to recover any sizable portion of this month’s steep pullback.
CAD: The June Canadian remains well supported this morning, but appears to be hesitant with taking this current rally up into new high ground. While the Bank of Canada remains in sharp contrast to other major central banks with their current tightening bias, the Canadian Dollar may need to get past Friday’s Canadian Employment data before making a run both at its 200-day moving average and the 100.00 price level. The June Canadian should be able to post a fresh high for the move and rise up toward the 99.58 level, and will benefit from improving risk sentiment both at home and abroad.