DOLLAR: The Dollar continues to see the flight to quality stance in the market tamped down. In fact, after seeing such dire macro economic forecasts early in the week, it appears that the markets are capable of ending the week with a mostly upbeat view and that in turn looks to leave the Dollar in a downward posture on the charts. Surprisingly the Dollar saw no support from comments early this morning from the Fed’s Fisher that there might not be positive growth until early 2010. However, with the Fed’s Fisher also suggesting that overall conditions would get “less worse” as the year progresses clearly leaves the market with an upbeat view. With the market seemingly dodging concerns about the US banking system from early in the week and the recent scheduled US data somewhat positive, the June Dollar Index above 86.00 earlier this week certainly seems to be an expensive level. In fact, we suspect that a slight upward extension in the US equity market later today will serve to press the June Dollar index down toward consolidation support on the charts down at 84.46. In fact, seeing another narrowing of the US Trade Deficit readings today could be seen as a negative to the US Dollar.
EURO: Despite the fact that German February industrial output decline by 2.9% the Euro looks to be catching the benefit of a general decline in global flight to quality sentiment. However, seeing a broad based rally in the international equity markets overnight probably provides the Euro with the most lift this morning. However, analysts continue to suggest that the lack of aggressive stimulus efforts and or quantitative easing moves from the ECB leaves the Euro zone well behind the curve and potentially the European economy well back in the pack of currencies that will see the early signs of recovery. Nonetheless, the Euro looks to win by default and largely because of technical considerations and that could in turn result in the June Euro managing a hard fought rise to 133.63 this session.
YEN: While the Yen is showing some interest in holding up around the prior session’s highs, there would appear to be a lack of interest in the June yen above the 100 level. In fact, since we expect a let down of the classic flight to quality anxiety in the marketplace today, we suspect that the Yen is poised to play a little catch up to the weakness seen in the Dollar in the prior trading session. Near term downside targeting in the June Yen today is seen at 99.60 and perhaps even 99.17 early next week.
SWISS: Perhaps seeing the Swiss unemployment come in unchanged overnight is being seen as a moral victory, but the biggest influence on the Swiss today looks to be the ebb and flow of flight to quality interests. In fact, if the stock market manages a distinct upside move today that could in turn serve to pull the Swiss up toward the initial resistance zone of 87.74 today.
POUND: The Pound is somewhat lost on its near term direction as the currency has managed a tight coiling pattern for most of this week. Traders might decide to go with a breakout of 147.80 and 146.29 in the June Pound but we doubt that the outlook for the global economy today will be favorable enough to give the Pound the capacity to rise back toward this week’s high of 149.62. Some traders will see the action this week as bearish as a pattern of lower highs has unfolded. We doubt that the UK inflation readings released overnight were of much importance but with the Pound recently forging a noted extension off the March rally, it could take a noted improvement in the global economic view in order to give the Pound bulls a definitive edge.
CANADIAN DOLLAR: With some potential key unemployment readings due out this morning and the Canadian managing a recent bounce, the onus would seem to be on the bull camp to get something “Not as bad as expected” in the Canadian Dollar. Some analysts expect the amount of job losses to be less than the prior month and that could be the main bull/bear catalyst today. The prior month showed a loss of 82,600 jobs. We think the odds are good that the Canadian will temporary dip back toward 80.41 today.