Yen crosses looked like they were going to be the focus in NY today, all drifting lower in early trading ahead of the Chicago PMI numbers. The market wasn’t expecting anything too exciting to happen with most looking to Friday’s NFP data as the catalyst for any moves…how wrong they were.

Chicago PMI came in at the lowest levels since 2009 and the USD selling began. The EUR/USD took out stops above the 1.3125 level as it headed higher before pausing ahead of the key 1.3200 level.

Cable headed higher and took out stops above the 1.5545 level before pausing at the daily channel top and 100-DMA.

USD/JPY dipped below the 97.35 Apr 29 low and USD/CAD traded down to 1.0054, the lowest levels since Feb.

The market appears to have realised that as a result of the poor data the US recovery may not appear as robust as thought with the Fed’s free money tap unlikely to be turned off any time soon. This has seen the US bourses bounce off lows and the move lower in the USD pause a little. EUR/USD, GBP/USD and AUD/USD have all paused ahead of decent daily resistance levels. Yen crosses also received a boost as a result of the market thinking that the Feds free money will continue to support the US equity market rally…certainly a turn around from stock market declines early in the day.