• US weekly jobless claims rise 12,000 to 472,000
  • US May CPI falls 0.2%, core rises 0.1%
  • US current account deficit rises less than expected, to $109 bln (mkt expected $121 bln) in Q1. Q4 deficit revised lower, to $101 bln from $116 bln.
  • Spain says does not need to go to market to sell bonds in July to cover EUR 24 bln in maturing bonds
  • Philly Fed survey plummets to 8.0 in June from 21.4 in May
  • IMF: Spain has not asked for funding
  • EU says stress test results to be published in mid-July for 25 largest banks
  • EU summit agrees stronger fiscal supervision needed; Europe will go it alone on bank levy if G20 does not go along
  • No borrowings from Fed swap lines this week
  • S&P 500 rallies late; gains 0.1%
  • Oil falls $1.13, gold rises to $1246

EUR/USD built on overnight gains in early New York trade, breaking through 1.2400 barrier options and rising as high as 1.2413 on very heavy short-covering. The timing of the move to session highs was curious it came after very poor Philly Fed data. In recent times, a negative economic surprise in the US would have sparked risk aversion but EUR/USD withstood the data and squeezed to session highs before finally giving way, falling to a NY low of 1.2339 about an hour after the data release.

We followed equities largely during an uneventful afternoon (World Cup soccer and US Open golf took the spotlight) and end the session well above Wednesday’s resistance levels around 1.2350/55. Stop-loss buy orders are seen in the 1.2415/30 area, traders report.

USD/JPY slumped sharply ahead of the Philly data, triggering stops below 91.00 and again below 90.80, falling as low as 90.51 intraday. The Philly data helped send the pair to its lows but USD/JPY managed an impressive recovery and ends the day back at 91.00. Sellers are seen at 91.00/10 while stops are clustered in the 91.10/20 area, traders report.

Cable was a warrior today, like EUR/USD, recouping most of the ground lost overnight on BOE King’s dovish remarks. We close at 1.4820, eying Wednesday’s highs with a mix of suspicion and dread.

AUD saw some buying against the euro today and managed to eek out a fresh high at 0.8684 despite what should have been risk averse conditions, a sign of quiet strength.

EUR/CHF was hammered to record lows today after the SNB shifted its currency policy. Intervention will no longer be conducted to ward off excess CHF strength but only to avoid deflation. We end at 1.3771 up from 1.3742 lows.