USD: The Dollar has been able to extend Monday’s bounce from 31/2-week lows with some moderate gains this morning, but still has plenty of work left to do to recover from its recent chart damage. A much lower than expected ISM number more than offset several days of positively-received US data points, and has dampened expectations that the Fed will shift towards “tapering” their asset purchases over the next few FOMC meetings. A large source of today’s strength has come from across the Pacific, as the Yen’s severe turnaround has shifted safe-haven support back into Dollars this morning. While today’s International Trade data and series of Fed speakers could help to reinforce this morning’s mild recovery, the Dollar may be looking forward at this Friday’s Payroll data as the best hope for fully regaining upside momentum. The Dollar may climb up towards the 83.05 level later this morning, but may need a fresh boost of safe-haven support to regain any large portion of recent losses in front of Friday’s increasingly critical US jobs data.
EUR: The June Euro was able to marginally build upon yesterday’s sharp rally, but may need to see a stronger tone from global risk sentiment in order to climb back above yesterday’s high for the move. A lukewarm reading for Euro zone PPI this morning may underscore the current low inflation levels throughout the region, but may not be enough to sway the ECB to ease any further at Thursday’s meeting. Yesterday’s set of PMI readings may have generally exceeded forecasts, but the market may be looking for consistent strength with Euro zone data in order to sustain any Euro recovery above the 130.00 level. As long as peripheral EU debt yields can remain subdued, however, the Euro should be able to consolidate these recent gains. The June Euro may slide back towards the 130.54 level later today, and should remain in fairly close proximity to the recent highs as long as risk appetites continue to be on the mend.
GBP: The June Pound may be another currency that has gone “too fast, too soon”, as the market remains under pressure even after a positive reading from the UK Construction sector this morning. While the Bank of England is likely to remain on the sidelines later this week, the Pound will clearly to see a positive tone from outside markets in order to find its footing and head back towards the upside. The June Pound could fall back towards the 152.70 area later today, but will hang onto a large portion of recent gains as long as potential Bank of England easing measures appear to be off the table for now.
JPY: The June Yen has plunged back below the 100.00 level this morning as the market continues to fall further away from yesterday’s spike highs. Reports that Japanese Prime Minister Abe will encourage his nation’s massive public pension funds to shift their investments out of JGB’s and into equities and overseas assets are weighing heavily upon the Yen this morning, which appeared to run out of short-covering momentum above the 101.00 level in the wake of yesterday’s weak ISM reading. Japanese equities appear to have found their footing after their 15% pullback, which will also keep the Yen squarely on the defensive during today’s trading. The Yen could make one more brief rally above the 100.00 level if today’s US Trade numbers disappoint the market, but continued calm with Japanese equities tonight would help to the drive the Yen further to the downside. The June Yen will find near-term support around the 99.55 level during today’s session, and may be showing early signs that it is ready to resume the longer-term downtrend over the next few sessions.
CHF: The June Swiss is finding moderate pressure this morning, but remains well below yesterday’s spike highs as the market continues to show volatile price action. While recent Swiss economic data has put up decent results, the Swiss Franc may need further help from outside markets in order to avoid another sizable pullback. The June Swiss should find decent support around the 105.10 level this morning, but will be looking for a stronger tone from global risk sentiment in order to climb back towards yesterday’s high for the move.
CAD: The June Canadian continues to have problems sustaining upside momentum, as the market has already given back a sizable portion of yesterday’s large-scale rally. While energy and metals markets may be providing near-term headwinds, the Canadian Dollar can benefit from a positive reception for this morning’s Canadian Trade data. The June Canadian may rise back above the 97.00 level later this morning, but may have to wait until Canadian jobs data on Friday to find enough strength to climb up and beyond yesterday’s monthly highs.