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DOLLAR: After showing some overnight strength, the Dollar turned around and moved lower this morning, reaching the lowest level since the middle of May. There has been a change in tone, as the results of today’s sovereign debt auctions in Spain and France were well received by the market and that has apparently dampened market fears of further problems in the Euro Zone. While the chances that a longer-term change in direction for the Dollar will require time and further substantive actions, the recovery in equity markets on both sides of the Atlantic will likely keep the Dollar bulls on the defensive this morning. Today’s US economic numbers will give the market plenty to digest later in the session, so we may not have seen the last of today’s volatility. However, the Dollar looks to be on the defensive going into the opening and may need some positive news of its own to find some support. With momentum against it, look for the Dollar to find support down near the 85.75 level.
EURO: While today’s sovereign debt auction in Spain indicated plenty of demand from the marketplace, the potential of a 4.86% yield from a Euro-denominated 10-year bond may have had a lot to do with today’s enthusiasm as well. In any case, the Sept Euro has found plenty of strength from the auction results both in Spain and France and therefore the Euro bulls looks to have the upper hand for today’s session. With the Euro now reaching towards the highest levels since late May, however, it will be interesting to see whether this week’s recovery has enough momentum to achieve an upside breakout. The Sept Euro is likely to make a test of resistance near the 1.2430 level during today’s session particularly if today’s US economic numbers give a boost to the equity markets both in the US and in Europe.
YEN: The change in market tone for the Euro Zone may ultimately put pressure on the Sept Yen, but prices have been able to hold up well this morning in spite of the change in Euro Zone sentiment. Look for the Sept Yen to find support around the 109.45 area, as it appears that safe-haven support may not exit the trade quickly.
SWISS: The news highlight of today’s Swiss National Bank meeting was the removal of a pledge to intervene against excessive gains against the Euro. This had the effect of a sharp rally, taking the Sept Swiss above the 90.00 level very quickly. Although the market may have lost upward momentum, the overnight gains have held up fairly well going into the US opening. While the move higher was fairly quick, look for the Sept Swiss to make a further move up to the 90.25 area, if the positive vibe for Europe can sustain itself through today’s US report slate.
POUND: With the market’s attention on other areas of Europe this morning, the Sept Pound has not found much in the way of carryover support although there has been a large recovery from overnight lows. Even with a stronger UK Retail Sales number this morning, look for the Sept Pound to lag behind the Euro and the Swiss as the unwinding of cross-spreads may keep the pressure on.
CANADIAN DOLLAR: If today’s Euro Zone debt auctions play a role in dampening risk aversion throughout the markets, then the Sept Canada should be a major beneficiary. The monthly survey of Canadian Manufacturing may prove to be a hurdle after the opening, but Canadian economic numbers have been relatively strong over the past few months. Look for the Sept Canada to make another test of the highs at 97.75 this morning, especially if economic numbers on both sides of the US/Canada border are strong.
TODAY’S MARKET IDEAS: The Dollar is likely to stay under pressure this morning, especially if there are no negative surprises from the US economic numbers later on in the day. The Sept Swiss should remain well supported this morning, but the Sept Canada still looks to have the most upside potential from present levels.
Currency Market Commentary – 2010.06.17
by Dave Hightower on June 17, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
DOLLAR: After showing some overnight strength, the Dollar turned around and moved lower this morning, reaching the lowest level since the middle of May. There has been a change in tone, as the results of today’s sovereign debt auctions in Spain and France were well received by the market and that has apparently dampened market fears of further problems in the Euro Zone. While the chances that a longer-term change in direction for the Dollar will require time and further substantive actions, the recovery in equity markets on both sides of the Atlantic will likely keep the Dollar bulls on the defensive this morning. Today’s US economic numbers will give the market plenty to digest later in the session, so we may not have seen the last of today’s volatility. However, the Dollar looks to be on the defensive going into the opening and may need some positive news of its own to find some support. With momentum against it, look for the Dollar to find support down near the 85.75 level.
EURO: While today’s sovereign debt auction in Spain indicated plenty of demand from the marketplace, the potential of a 4.86% yield from a Euro-denominated 10-year bond may have had a lot to do with today’s enthusiasm as well. In any case, the Sept Euro has found plenty of strength from the auction results both in Spain and France and therefore the Euro bulls looks to have the upper hand for today’s session. With the Euro now reaching towards the highest levels since late May, however, it will be interesting to see whether this week’s recovery has enough momentum to achieve an upside breakout. The Sept Euro is likely to make a test of resistance near the 1.2430 level during today’s session particularly if today’s US economic numbers give a boost to the equity markets both in the US and in Europe.
YEN: The change in market tone for the Euro Zone may ultimately put pressure on the Sept Yen, but prices have been able to hold up well this morning in spite of the change in Euro Zone sentiment. Look for the Sept Yen to find support around the 109.45 area, as it appears that safe-haven support may not exit the trade quickly.
SWISS: The news highlight of today’s Swiss National Bank meeting was the removal of a pledge to intervene against excessive gains against the Euro. This had the effect of a sharp rally, taking the Sept Swiss above the 90.00 level very quickly. Although the market may have lost upward momentum, the overnight gains have held up fairly well going into the US opening. While the move higher was fairly quick, look for the Sept Swiss to make a further move up to the 90.25 area, if the positive vibe for Europe can sustain itself through today’s US report slate.
POUND: With the market’s attention on other areas of Europe this morning, the Sept Pound has not found much in the way of carryover support although there has been a large recovery from overnight lows. Even with a stronger UK Retail Sales number this morning, look for the Sept Pound to lag behind the Euro and the Swiss as the unwinding of cross-spreads may keep the pressure on.
CANADIAN DOLLAR: If today’s Euro Zone debt auctions play a role in dampening risk aversion throughout the markets, then the Sept Canada should be a major beneficiary. The monthly survey of Canadian Manufacturing may prove to be a hurdle after the opening, but Canadian economic numbers have been relatively strong over the past few months. Look for the Sept Canada to make another test of the highs at 97.75 this morning, especially if economic numbers on both sides of the US/Canada border are strong.
TODAY’S MARKET IDEAS: The Dollar is likely to stay under pressure this morning, especially if there are no negative surprises from the US economic numbers later on in the day. The Sept Swiss should remain well supported this morning, but the Sept Canada still looks to have the most upside potential from present levels.
Tags: Canadian, Currencies, Dollar, Pound, Swiss, Yen
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