USD: The Dollar has been fairly subdued to start out this new trading week, but was able to grind out a modest gain coming into this morning’s session. While the Dollar continues to find a major source of strength from rising Japanese equities, there has been little else to help lift prices away from their recent lows. Recent US economic data has painted a mixed picture, leaving the chances of Fed tapering at this week’s FOMC meeting very much up in the air. There will be two US economic numbers later this morning that may provide the Dollar with fresh support but until the Fed is heard from later this week, a surge of safe-haven strength may be needed in order to rise clear of these recent lows. The Dollar may climb up to the 81.05 area later today, and will be hoping for continued strength in Japanese equity markets over the next few sessions. The Commitments of Traders Futures and Options report as of June 11th for US Dollar showed Non-Commercial traders were net long 43,160 contracts, a decrease of 621 contracts. The Commercial traders were net short 49,469 contracts, a decrease of 4,952 contracts. The Nonreportable traders were net long 6,308 contracts, a decrease of 4,332 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 49,468 contracts. This represents a decrease of 4,953 contracts in the net long position held by these traders.
EUR: The September Euro is showing few signs of retesting last week’s high for the move as prices are consolidating in close proximity to the 133.50 area early this morning. While a weaker than expected reading for the Euro zone Trade surplus during April has provided little pressure, the Euro is also finding little lasting benefit from this morning’s improving tone in global risk sentiment. Peripheral EU debt yields have been subdued so far this week, which should help to underpin the Euro near its recent highs. While the Euro will continue to benefit from staying out of the market’s spotlight, prices remain fairly vulnerable to a swift pullback if one of the EU’s trouble-spots starts to generate fresh news headlines. For now, the September Euro should find support around the 133.25 level and hold onto a sizable portion of recent gains. The Commitments of Traders Futures and Options report as of June 11th for Euro showed Non-Commercial traders were net short 7,714 contracts, a decrease of 45,158 contracts. The Commercial traders were net long 25,157 contracts, a decrease of 49,675 contracts. The Nonreportable traders were net short 17,443 contracts, a decrease of 4,517 contracts. Non-Commercial and Nonreportable combined traders held a net short position of 25,157 contracts. This represents a decrease of 49,675 contracts in the net short position held by these traders.
GBP: The September Pound was able to extend last Friday’s recovery rally into this week, but just missed on posting a new 4-month high early in today’s trading. As long as the tone of outside markets remains fairly positive, the British Pound looks to be heading up into new high ground during the next few sessions. The September Pound could climb up towards the 157.42 level later today, and should remain fairly well supported early during this trading week.
JPY: The September Yen posted sizable losses during the overnight session, but remains well inside of Friday’s trading range and has only given back a small portion of last week’s enormous gains. The Nikkei was up sharply again this morning and has put together two large daily gains in a row, which “should” keep the Yen on the defensive through the balance of today’s trading. However, the upsurge in Japanese longer-term yields in the wake of the BOJ’s easing measures has helped to fuel widespread short-covering and unwinding of carry trade coming into the end of the second quarter. Japanese equities do not have to regain all of their recent losses but if they can show signs of stabilizing over the next few sessions, the Yen will stay firmly on the defensive. The September Yen may fall down to the 105.08 level later today, and is likely to remain under pressure until Japanese financial markets are heard from again later tonight.
CHF: The September Swiss is posting moderate losses this morning, and remains far below last week’s spike highs this morning. Today’s modest rebound in global risk sentiment has caused mild liquidation to fall on the Swiss Franc, particularly against the Euro. The September Swiss should find near-term support around the 108.10 area, and remains vulnerable to a sharp pullback from these current price levels.
CAD: The September Canadian found moderate support from stronger energy markets early this week, but has yet to re-challenge last Friday’s high for the move this morning. While a stronger tone from recent Canadian economic data has helped to underpin this current rally, the Canadian Dollar may need to see a “risk on” mood develop throughout global markets in order to extend this current rally. The September Canadian may climb up towards the 98.35 level later this morning, but may have to wait the FOMC meeting later this week in order to see a large upside move from these current price levels.