Previous session overview
The dollar rose to a near two-week high of JPY97.00 against the yen in Tokyo Wednesday as Asian dealers followed in the footsteps of U.S. players who overnight dumped currencies such as euros and yen for dollars.
The greenback rose sharply after triggering buying orders around JPY96.50 placed by players who aim to cut losses, dealers said.
The focus on the U.S. jobs data muted any impact from the Bank of Japan's tankan quarterly business sentiment survey, which showed large manufacturers' mood improving less than expected, dealers said.
The euro gave up early gains, shedding over 1.5 cents from highs at USD1.4150 following the release of the US economic data. Investors remain cautious as they await the European Central Bank meeting and unemployment data due Thursday.
GBP experienced a volatile session trading at new highs for 2009 supported by a report that UK housing prices rose in June. GBP came off its highs in reaction to report that UK Q1 GDP contracted at its fastest in 51 years.
The Canadian dollar dipped versus the US dollar following the release of Canadian GDP. GDP fell -0.1% in April in the 9th straight month of declines.
Weakness in global stock markets and poor domestic housing data triggered selling in the Australian dollar in the Asian session late Wednesday. Trade in the currency is likely to be choppy as it negotiates an obstacle course of key economic data, both domestic and offshore, in the next few trading sessions.
Market expectation
The euro, with sell orders said to be looming around USD1.4150, is little changed against the dollar Wednesday, but both are gaining against the yen while the pound is mired in ranges against the majors.
Traders are getting back into the safe-haven dollar all the more ahead of the June U.S. payrolls report.
Traders said the U.S. currency is likely to stay hemmed in a narrow range capped around JPY97 for the rest of the day.
European stocks are expected to open higher Wednesday, with investors set to start the new month and quarter seeking bargains after Tuesday's selloff.
For EURUSD Strong demand said to remain in place toward USD1.4000, with spec trader's front running, leaving stops scattered between USD1.3990/80. A break here may allow for a deeper move toward USD1.3970. Resistance seen placed at USD1.4045/60 (USD1.4058 38.2% USD1.4153/1.4000), a break above to open a move toward USD1.4090/00 (USD1.4095 61.8%) ahead of USD1.4120.
Pound is dropping to a low of USD1.6383 (USD1.6384 38.2% USD1.5800/1.6745) before meeting demand placed ahead of USD1.6380. Rate has since recovered but offers placed at USD1.6425 so far restrict further upside progress. A break of USD1.6425 may open a move toward USD1.6445/50. Below USD1.6380 and rate can extend downside toward USD1.6350.
Most important events of the day
| 1-Jul | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 0:00 | US | Vehicle Sales | Jun | mn | Low | 9.8 | 9.83 | |
| 0:00 | CA | Market Holiday - Canada Day | Low | |||||
| 0:00 | EU | Sweden to assume six month E.U. rotating presidency | Low | |||||
| 1:00 | AU | DEWR Skilled Vacancies | Jun | % m/m | Low | -7 | ||
| 1:00 | US | San Francisco Fed President Yellen to give speech before the Commonwealth club of California on "A view of the economy from the Federal Reserve" | Low | |||||
| 1:30 | AU | Retail trade | May | % m/m | High | 1 | 0.5 | 0.3 |
| 1:30 | AU | Building approvals | May | % m/m | Low | -12.5 | 3 | 5.1 |
| 1:30 | AU | Building approvals | May | % y/y | Low | -6.9 | -16.1 | |
| 1:30 | AU | Engineering Construction Activity | Q1 | % q/q | Low | |||
| 6:00 | DE | Retail Sales | May | % m/m | Med | 0.4 | 0.5 | 0.5 |
| 6:00 | DE | Retail Sales | May | % y/y | Med | -2.9 | -1.5 | -0.3 |
| 6:30 | SE | Manuf. PMI (sa) | Jun | index | Low | 45 | 43.7 | |
| 7:30 | DK | Retail Sales | May | % m/m | Low | 0.5 | -0.6 | |
| 7:30 | DK | Retail Sales | May | % y/y | Low | -6.8 | ||
| 7:30 | CH | Manuf. PMI | Jun | index | Low | 39.8 | ||
| 7:45 | IT | Manuf. PMI | Jun | index | Low | 42.5 | 41.1 | |
| 7:50 | FR | Manuf. PMI | Jun | index | Low | 43.3 | 43.3 | |
| 7:50 | FR | Manuf. PMI | Jun | index | Low | 45.5 | 45.5 | |
| 7:55 | DE | Manuf. PMI | Jun | Index | Med | 40.5 | 40.5 | |
| 8:00 | EU | Manuf. PMI | Jun | index | Low | 42.4 | 42.4 | |
| 8:00 | GB | Halifax House Price Index (1st-10th) | Jun | % 3m y/y | Low | -16.3 | ||
| 8:00 | GB | Halifax House Price Index (1st-10th) | Jun | % m/m | Low | 2.6 | ||
| 8:30 | GB | CIPS Manuf. PMI | Jun | index | Med | 46.4 | 45.4 | |
| 9:00 | DK | Manuf. PMI | Jun | index | Low | 40.9 | ||
| 12:15 | US | ADP Employment | Jun | k | Med | -394 | -532 | |
| 14:00 | US | Construction Spending | May | % m/m | Low | -0.6 | 0.8 | |
| 14:00 | US | ISM Survey (Manf.) | Jun | index | High | 44.6 | 42.8 | |
| 14:00 | US | Pending Home Sales | May | % m/m | Med | 0.3 | 6.7 | |
| 15:15 | US | Chicago Fed President Evans speaks in London at the European Economics and Financial Centre on "The credit crisis and policy actions" | Low | |||||
| 17:00 | IT | Budget Balance | Jun | EUR mn | Low | -7.6 |
