USD: The Dollar was able to put together a moderate rebound this morning, but remains well inside of yesterday’s trading range. While yesterday’s well-received US data provided some measure of support, the Dollar’s main source of strength continue to come from across the Pacific as a rebound in Japanese equities has taken some of the steam out of the Yen’s recent updraft. Global risk appetites appear to be on the mend this morning, which will likely help to keep further Dollar gains in check later today. Today’s US economic data may help to strengthen the case for potential Fed tapering hints at next week’s FOMC meeting, but the Dollar’s best hope for a large-scale recovery going into this weekend may have to come from a fresh infusion of safe-haven support. The Dollar may climb up towards the 81.23 resistance level but may have to wait until there is consistent strength in Japanese financial markets before making any decisive move away from these recent lows.
EUR: The September Euro is finding moderate pressure this morning, but is currently holding onto a large portion of recent gains heading into this weekend. Lukewarm Euro zone inflation readings and a 0.5% drop in Euro zone Employment during the first quarter have dampened sentiment early in today’s trading, but neither data point came as a great surprise to a market that has gotten used to sluggish Euro zone economic readings. Peripheral EU debt yields are falling back after their upsurge this week, which is likely to provide more than enough underlying support to keep any large-scale Euro pullback off the table for now. As long as risk attitudes continue to show improvement this morning, the Euro should remain fairly well supported going into the weekend. The September Euro may test the 133.00 resistance area but is likely to finish out this week’s trading in fairly lose proximity to yesterday’s new high for the move.
GBP: The September Pound has fallen well away from the recent highs, and is finding significant pressure early in today’s session. News that BOE Deputy Paul Tucker will be leaving his position later this year has eroded sentiment for the Pound this morning, as there is concern that his replacement may take a more “dovish” tone with UK monetary policy. The September Pound may slide down to the 155.80 area and looks to finish out the week on the defensive in spite of the improvement in global risk sentiment.
JPY: The September Yen has returned to unchanged levels after a bumpy night of trading, but appears to have lost yesterday’s strong upside momentum that took prices up to a fresh 2-month high. The Nikkei’s 1.94% rebound last night may be a fraction of Thursday’s 6.3% selloff, but has certainly helped to calm down market anxiety not only in Japan but around the globe this morning. With the end of the second quarter of 2013 on the market’s horizon, continued unwinding of “carry” trades is likely to provide the Yen with some measure of support. Given the poor market reception to fresh policy moves on the monetary and fiscal sides, there is a strong likelihood that Japanese authorities will ramp up fresh easing and simulative measures over the near future. Until that happens, the market may need to see stability in Japanese equity markets before the Yen can make a sizable downside move away from these recent highs. The September Yen could fall back towards the 104.90 area but is unlikely to slide far from these current prices levels until there is fresh input from Japanese markets.
CHF: The September Swiss is under moderate pressure this morning, and remains well below yesterday’s spike highs. The Swiss Franc barely missed posting a key reversal during yesterday’s session, which would have led to fresh technical pressure on the market, but calmer global markets may drain enough safe-haven support to take prices further to the downside to finish out this week’s trading. The September Swiss should find decent support around the 107.84 area but continues to be fairly vulnerable to a significant pullback from these recent highs.
CAD: The September Canadian was able to put together modest gains this morning, and is now within striking distance of finishing out this week in new high ground for this month’s recovery rally. A stronger tone from recent Canadian economic data has been a critical factor in this rebound, so today’s Canadian Manufacturing Sales numbers will need to extend that positive vibe in order for the market to hold onto its early strength. The September Canadian may climb up towards the 98.30 level but may need additional help from outside markets in order to post a new monthly high.