Dollar:  At least to start today the dollar appears to be catching a safe haven bid but not as large of a safe haven bid as the Yen.  While we understand the potential undermine of the USD as result of its military actions overnight it looks to generally be in vogue because of the potential for payroll gains that denote ongoing recovery.  However, in order to breach the 101 level today probably requires a nonfarm payroll gain above 190,000.  In other words, the number today has to be strong enough to spark realistic talk of a near term interest rate hike.  On the other hand, in the face of generally hawkish news from a fed member earlier this week, the inability to sustain gains on Wednesday that would seem to make the 101 level fairly solid resistance.

 

Euro: An extending pattern of lower lows on the euro chart combined with initial preference for this week’s lows in the early going leaves the bear camp in control.  In fact the failure to see the euro temporarily benefit from German industrial production readings and from a slightly better than expected French industrial output reading highlights an ongoing negative fundamental condition in the euro.  The bear camp will suggest that French industrial output was contractionary, even if that reading was not as bad as expected.  While we think the dollar will be unable to hold large gains today it is difficult to rule out the prospect of a probe down to 106 in the June euro over the coming week.