USD: The Dollar is finding modest early support this morning, but is still lacking enough strength to move above yesterday’s high for move. Yesterday’s US data may have been on the disappointing side but did little to stem the inflow of safe-haven support that has underpinned the Dollar in close proximity to the recent highs. There will be a much larger cross-section of US economic data to digest this morning, so the Dollar will remain vulnerable to a near-term setback if sluggish Housing and Jobless Claims readings give the market pause for thought on the strength of the US economy. Subdued global risk appetites will help the Dollar remain fairly well supported during today’s trading, but a positive reception for this morning’s US data may be required for any sizable move up into new high ground. The Dollar will find near-term support around the 83.85 area in front of today’s US data window, and will continue to benefit from being the safe-haven destination of choice while risk aversion dominates global markets.
EUR: The June Euro was successful in bouncing back from an early test of yesterday’s low for the move but is still some distance away from fully regaining upside momentum this morning. While Euro zone inflation readings came in at multi-year lows, a record high Euro zone trade surplus during March has provided some measure of support to prices. It will be difficult to fully shake off the negative impact of yesterday’s sluggish GDP readings from throughout the region, particularly with risk sentiment subdued at best this morning. As long as peripheral EU trouble-spots stay out of market news headlines this morning, the Euro will have a chance to extend this morning’s recovery. The June Euro may rise up towards the 128.90 level later in the session, and will be a major beneficiary of any rebound in global risk sentiment later in the session.
GBP: The June Pound remains fairly subdued this morning, and continues to be weighed down by lukewarm global risk sentiment. Recent improvement with UK economic data has diminished the chances for a resumption of BOE easing measures over the next few months, but the Pound clearly needs to get further assistance from outside markets in order to recover a large portion of recent losses. The June Pound may climb up towards the 152.50 area later today, and could see a sharp upside move if global risk sentiment significantly improves over the rest of this week’s trading.
JPY: The June Yen could not extend an overnight rally back above yesterday’s highs, and is once again back on the defensive coming into this morning’s trading. A better than expected reading for Japanese GDP provided a source of strength for the Yen during overnight trading, but will be unable to put the brakes on current aggressive Japanese easing measures unless there are additional signs of progress from upcoming Japanese economic data. The Yen will also benefit from diminished global risk appetites this morning, although it will clearly remain a second choice to the Dollar as a destination for flight to safety flows. Although the longer-term downtrend will remain firmly intact this morning, we would still wait for a near-term pullback to the 98.35 area before approaching the short side of the market using long put option strategies. The June Yen may rebound to the 97.70 level early this morning, and could climb further into positive territory if today’s set of US economic data fails to match market expectations.
CHF: The June Swiss has shown resiliency by putting together a large recovery rally for the second straight session, but still remains near the bottom end of this month’s severe downdraft. SNB officials continue to feel that the Swiss Franc is overvalued relative to the Euro, which will keep their current floor rate of 1.20 intact going forward. The June Swiss could rally up towards the 128.70 level later on in today’s session, but will need to see much stronger improvement with Euro zone sentiment in order to have any chance for an extensive recovery from these current low price levels.
CAD: The June Canadian failed to sustain an overnight rally and is sliding further into negative territory going into this morning’s trading session. Plunging energy and metals prices will make it difficult for the market to sustain upside momentum in front of tomorrow’s Canadian inflation data. The June Canadian may bounce back towards the 98.25 level later today, and will need support from upcoming data on both sides of the US/Canada border to avoid a retest of yesterday’s monthly low.