EURO
The euro depreciated marginally vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3580 level and was capped around the US$ 1.3620 level. Technically, today’s intraday low was right around the 23.6% of the move from $1.3255 to $1.3680. Traders await the all-important April non-farm payrolls number in the U.S. tomorrow with many economists’ forecasts having been scaled back recently on account of a perceived reduction in private-sector jobs. Data released in the U.S. today saw Q1 productivity increase +1.7% while Q1 unit labour costs were up +0.6%, much less-than-expected. Also, weekly initial jobless claims fell 21,000 to 305,000 while continuing jobless claims fell 93,000 to 2.50 million. Moreover, the ISM non-manufacturing index improved to 56.0 from 52.4. In eurozone news, the European Commission reported EMU-13 growth prospects are the most favourable they have been “for many years.” The EC, however, reported that “exchange rate tensions” are a risk to growth. The eurozone economy expanded 2.7% last year, its highest rate of growth since 2000. ECB Economic and Monetary Affairs Commissioner Alumnia reported he is “sticking to the G7 statement (on exchange rates)” in which policymakers said exchange rate volatility is “undesirable.” Data released in the eurozone today saw March producer price inflation climb +0.3% m/m and +2.7% y/y. Euro bids are cited around the US$ 1.3515 level.
JPN/ CNY
The yen depreciated marginally vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥120.25 level and was supported around the ¥119.95 level. Technically, today’s intraday high was right below 23.6% retracement of the move from ¥114.45 to ¥122.15. Liquidity will continue to remain reduced during the Australasian sessions through early next week on account of the Golden Week holidays. The largest issue concerning the yen remains a pullback in short yen carry trades, of which more than $100 billion are said to be on the banks of mostly Japanese banks. Dollar bids are cited around the ¥119.20 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥163.60 level and was supported around the ¥163.20 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥239.55 and ¥99.25 levels, respectively.
STERLING
The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.9870 level and was capped around the $1.9945 level. Technically, today’s intraday low was just above the 50% retracement of the move from $1.9590 to $2.0130. Data released in the U.K. today saw CIPS April services PMI tick lower to 57.2 from 57.6 in March, a seven-month low. Many traders believe Bank of England’s Monetary Policy Committee will tighten monetary policy by +25bps next week. BoE Governor King has recently alluded to the strong growth in the U.K. money supply and this is a strong indication the repo rate will move higher next week. Cable bids are cited around the US$ 1.9840/ 1.9770 levels. The euro came off vis-à-vis the British pound as the single currency tested bids around the £0.6820 level and was capped around the £0.6835 level.
SWISS
The Swiss franc weakened vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.2155 level and was supported around the CHF 1.2090 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from CHF 1.2770 to CHF 1.1875. Data released in Switzerland today saw the April consumer price index climb 1.1% m/m and 0.5% y/y. Traders continue to use the Swiss franc as a funding vehicle for carry trades, maintaining downward pressure on the franc. Dollar offers are cited around the CHF 1.2215 level. The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6465 and CHF 2.4090 levels, respectively.
AUD
The Australian dollar moved lower vis-à-vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8220 level and was capped around the $0.8255 level. Technically, today’s intraday high was right around the 38.2% retracement of the move from $0.8030 to $0.8390. Traders await tomorrow’s quarterly monetary policy statement from Reserve Bank of Australia with many anticipating the central bank is likely to hike rates at least another +25bps this year. Data released in Australia today saw the April services index rise to 52.8 from 51.2 in March. Australian dollar bids are cited around the US$ 0.8210/ 0.8165 levels.
CAD
The Canadian dollar appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.1055 level and was capped around the C$ 1.1095 level. Traders await comments from Bank of Canada Governor Dodge tomorrow along with April PMI data. U.S. dollar offers are cited around the C$ 1.1150 level.