Russia's about-face on the US dollar got the ball rolling in what turned out to be a stellar NY session for the buck. Russian Finance Minister Kudrin said the dollar is in ''good shape'' and this was another in a long line of dollar bullish comments from multiple officials of late. Equity marts were weak, printing a down -2.3% day as economic data continue to bounce along the bottom. The NY Empire manufacturing index dropped to -9.41 in June from -4.55 prior and given that the market was looking for a pretty well unchanged result, this was a big disappointment. On the speaker front, ECB's Nowotny offered some dovish EUR comments towards the latter part of the session. He noted that Europe is in a very deep ''depression'' (yes, the D-word) and warned against a pre-mature exit strategy on the policy front. The damage to EUR, however, was more technical in nature it seems.

The big move in EUR/USD came on the break of the head and shoulders neckline near 1.3810/00, which practically everyone on the street had been talking about this morning. The pair sank more than 60 pips into the 1.3790 area and it looks like we need to slip back above that 1.3800/10 zone to shift the short-term focus. The measured move potential form the head and shoulders break is all the way down to 1.3250/00, so this could merely be the beginning of things to come. USD/JPY and EUR/JPY were weak on the selloff in stocks. The former dropped -40 pips to 97.80/90 while the latter sank like a stone and fell 120 pips into the 134.90/95 zone. Should overseas equity marts continue the weakness, we would look for additional gains for the USD and for the yen crosses to remain under pressure in the overnight sessions.

Upcoming Economic Data Releases (Asia Session) prior expected

  • 6/16 1:30 GMT AU  Reserve Bank's Board June Minutes
  • 6/16 3:00 GMT NZ  Non Resident Bond Holdings  MAY  71.30%  - -
  • 6/16 JN GMT BOJ Target Rate  16-Jun  0.10%  0.10%
  • 6/16 5:30 GMT JN  Tokyo Dept. Store Sales (YoY)  MAY  -11.90%  - -
  • 6/16 5:30 GMT JN  Nationwide Dept. Sales (YoY)  MAY  -11.30%  - -