USD: The Dollar has followed through on yesterday’s strong rally with moderate gains this morning, and has swiftly reached the highest price levels since late April. A decent set of Jobless Claims data played a major role in yesterday’s events, as they were the first “top-tier” US data that the market has digested since late last week. Rumors of a news story that the Fed would be “tapering” their QE sooner than expected also helped to reinforce yesterday’s substantial gains. Even so, the Dollar’s main source of strength continues to come from across the Pacific as the Yen’s collapse will help to reinforce the Dollar’s role as safe-haven destination of choice. While the market will not have fresh US data this morning to take note of, comments by Fed Chairman Bernanke in Chicago may provide the Dollar with a fresh boost later this morning. The Dollar may extend this rebound to the 83.24 area by the end of this week’s trading, and will remain the major beneficiary of Yen weakness going forward.
EUR: The June Euro was unable to put together any sustained rebound from yesterday’s late downdraft, and is threating to make a strong move below 130.00 level to finish out this week’s trading. This morning’s German Trade numbers were lukewarm at best, and the support found from diminished peripheral EU debt yields has been unable to put the brakes on the Euro’s turnaround late this week. While the Euro has also reached a multiyear high versus the Yen this morning, the slack tone of non-German economic readings has also left the Euro well behind the Dollar in comparative strength. With “risk” assets likely to remain on the defensive through the rest of this week, the Euro may be dragged further to the downside during today’s session. The June Euro should find support around the 129.75 level, and is in need of some positive news from peripheral EU trouble-spots in order to shake off early today’s negative tone.
GBP: The June Pound continues to lose ground this morning, and has slumped to a new monthly low early in today’s trading. The inability to break out above the 156.00 level came back to haunt the British Pound, as recent positive UK economic data and the Bank of England holding off on fresh easing measures have made little difference with avoiding this current sharp downdraft. The June Pound may extend this week’s pullback down to the 153.46 level later this morning, and will need to see a vastly improved tone from outside markets in order to regain any lasting upside momentum.
JPY: The June Yen remains in a nosedive this morning, and continues to drive further into multi-year low ground after yesterday’s dramatic events. The combination of strong US data, rumors of Fed QE “tapering” and hints that the G7 will not confront Japan on their aggressive easing measures at this weekend’s meeting helped the Yen to make a successful downside breakout through the 100.00 level. Last night’s Japanese economic data has done little to stem the downward tide of the market, as waves of sell-stops continue to be touched off this morning. At this point, the only event that could put some brakes on this current downdraft would be an overseas risk flare-up, although the Dollar will continue to receive the lion’s share of any safe-haven inflows. The June Yen will have a near-term downside target of 98.05 during today’s session, and appears to have much, much further downside left to go before finding any longer-term support.
CHF: The June Swiss has found heavy pressure once again, and reached a new 81/2-month low before making a sizable bounce early this morning. With the SNB unlikely to alter their 1.20 floor rate with the Euro, the potential revival of the “carry trade” in the wake of the Yen’s meltdown will likely to keep the Swiss Franc on the defensive over the near future as it will become the main “non-Yen” choice in the near term. The June Swiss is likely to retest the 104.35 overnight lows once again this morning, and may well produce a fresh new low for the move to finish out this week’s trading.
CAD: The June Canadian was able to bounce back from a new weekly low during overnight trading, and is grinding out a modest gain in front of this morning’s critical events. While the positive tone of recent Canadian economic data has underpinned the Canadian Dollar during its strong rally over the past few weeks, any chance for a quick return to yesterday’s high for the move will depend on this morning’s Canadian Employment data. After last month’s huge miss, the market will need to see a fairly positive reception for today’s jobs number in order for the Canadian Dollar to regain upside momentum. The June Canadian should hold onto early gains and rise to the 99.36 level early in today’s session, and then will clearly need to see strong Canadian jobs data to hold onto and extend this early rebound.