Forex Market Update - page 3
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This morning, the greenback is trading lower against most of the major currencies.
Yesterday, the St. Louis Fed President, James Bullard stated that Fed would be very cautious in altering the tapering pace of its stimulus measure and any change in the course of the taper would give strong signals to the markets. He further opined that the recent batch of lackluster economic US releases would not have any impact on the Fed decision to taper its stimulus.
The Euro is trading higher this morning. Earlier today, the ECB’s monthly report reiterated its forward guidance on keeping interest rates at present or lower levels for an extended period of time and further highlighted that the inflation in the region remained subdued.
Yesterday, the Euro-bloc’s common currency faced resistance following ECB member, Benoit Coeure’s comments that the central bank might consider a negative interest rate in the region to support the fragile recovery of the economy.
In a noteworthy development, the Italian government successfully auctioned its 3-year bond at a record low yield of 1.41%, compared to a 1.51% yield recorded in January 2013.
The Australian Dollar is trading lower against its US counterpart after unemployment in the nation unexpectedly rose to the highest level in more than 10 years and after the IMF stated that the Aussie is overvalued at present.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3673 against the USD, 0.58% higher from the New York close. The greenback came under pressure amid concerns that today’s retail sales report may prove to be a disappointment. The ECB, in its monthly report, emphasized that it would continue with its forward guidance on keeping interest rates at current or lower level for a prolonged period of time in the Euro-zone. During the session, the pair traded at a high of 1.3687 and a low of 1.3589. Yesterday, the EUR traded 0.13% higher against the USD in the New York session, and closed at 1.3594.
The pair is expected to find its first support at 1.3594 and first resistance at 1.3720.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6646 against the USD, 0.30% higher from the New York close, despite a slide in the RICS house price index. During the session, the pair traded at a high of 1.6655 and a low of 1.6601. Yesterday, the British Pound traded 0.47% higher versus the Dollar in the New
York session, and closed at 1.6597, after the BoE’s upbeat growth-forecast on the Britain economy.
The pair is expected to find its first support at 1.6541 and first resistance at 1.6703.
USD JPY
The USD is trading at 101.95 against the JPY at 10:40 GMT this morning, 0.58% lower from the New York close. On the economic front, data from Japan showed that the nation’s domestic corporate goods price index eased in January. During the session, the pair traded at a high of 102.58 and a low of 101.95. In the New York session yesterday, the USD traded 0.25% higher against the JPY, and closed at 102.54.
The pair is expected to find its first support at 101.66 and first resistance at 102.44.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8934 against the Swiss Franc, 0.79% lower from the New York close. Early morning, the Federal Statistical Office reported that, on a monthly basis, producer and import prices in Switzerland stood unchanged in January. During the session, the pair traded at a high of 0.9011 and a low of 0.8936. In the New York session yesterday, the USD traded 0.16% lower against the CHF, and closed at 0.9005.
The pair is expected to find its first support at 0.8892 and first resistance at 0.9007.
USD CAD
At 10:40 GMT, the USD is trading at 1.0985 against the CAD, 0.17% lower from the New York close, ahead of Canada’s new housing price index data. During the session, the pair traded at a high of 1.1019 and a low of 1.0981. Yesterday, the USD traded marginally lower against the CAD in the New York session, and closed at 1.1004. Canadian Finance Minister, Jim Flaherty, hinted towards more stimulus measures if disinflation refuses to budge in the economy.
The pair is expected to find its first support at 1.0966 and first resistance at 1.1011.
AUD USD
The AUD is trading at 0.8966 against the USD, at 10:40 GMT this morning, 0.64% lower from the New York close, after data showed that unemployment in Australia unexpectedly jumped to 6.0% in January and following IMF’s downbeat assessment of the Aussie. During the session, the pair traded at a high of 0.9033 and a low of 0.8934. AUD traded 0.12% lower against the USD in the New York session, and closed at 0.9024.
The pair is expected to find its first support at 0.8909 and first resistance at 0.9039.
Gold
At 10:40 GMT, Gold is trading at $1290.64 per ounce, 0.07% lower from the New York close, ahead of US retail sales data. This morning, Gold traded at a high of $1293.29 and a low of $1286.35 per ounce. In the New York session yesterday, the yellow metal traded slightly higher, and closed at $1291.58.
Gold has its first support at $1285.89 and first resistance at $1295.86.
Silver
Silver is trading at $20.22 per ounce, 0.14% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.33 and a low of $20.15. Silver traded 0.21% lower against the USD in the New York session, and closed at $20.25.
Silver has its first support at $20.10 and first resistance at $20.37.
Crude Oil
At 10:40 GMT, Oil is trading at $99.66 per barrel, 0.60% lower from the New York close. This morning, Oil traded at a high of $100.37 and a low of $99.40. Yesterday, Oil traded 0.20% lower in the New York session, and closed at $100.29, after the Energy Information Administration (EIA) reported a rise of 3.3 million barrels in the US weekly stockpiles, last week.
It has its first support at $98.91 and first resistance at $100.89.
Economic Snapshot
UK RICS house price balance fell unexpectedly in January
The RICS house price balance in the UK dropped to a level of 53.0% in January, following an increase of 56.0% recorded in the preceding month. Markets were expecting house price balance to rise to 58.0% in January.
ECB reiterated forward guidance on interest rates
The European Central Bank (ECB), in its monthly report for February, reiterated its forward guidance on keeping interest rates at present or lower levels for an extended period of time. The central bank, however, stated that it would maintain its monetary accommodation and might take further decisive action if required.
German harmonized consumer price index declined in line with preliminary estimate in January
On an annual basis, final harmonized consumer price (HICP) index in Germany increased 1.2% in January, compared to a similar rise in the previous month. Similarly, on an annual basis, final consumer price index in Germany rose 1.3% in January, following a 1.4% rise in prior month.
Swiss producer and import prices remained flat in January
On a monthly basis, producer and import prices in Switzerland remained flat in January, compared to the previous month. Markets were expecting producer and import prices to drop 0.1% in January.
US Senate approved debt ceiling hike
The US Senate approved a House-passed bill by a vote of 55 to 43 with no conditions or amendments attached to extend the government’s borrowing limit through March 2015 after a prolonged preliminary vote. The bill now awaits President Barack Obama’s signature.
Australia consumer inflation expectation remained unchanged in February
Consumer inflation expectations in Australia remained unchanged at 2.3% in February, compared to the previous month.
Australia’s unemployment rate rose more than expected in January
The Australian Bureau of Statistics has reported that on a seasonally adjusted basis, unemployment rate in Australia rose to 6.0% in January, more than market expectations and compared to a rate of 5.8% reported in the previous month. Meanwhile, seasonally adjusted number of people employed in Australia fell by 3.7K in January, compared to a revised fall of 23.0K in the previous month. Seasonally adjusted full time employment in Australia declined by 7.1K in January, compared to a revised drop of 32.1K employees recorded in the previous month.
Happy pips.
Forex Market Update 14Fev14
This morning, the greenback is trading lower against most of the major currencies amid concerns over today’s reports of industrial output and Reuters/Michigan consumer sentiment.
Yesterday, the US dollar declined against major counterparts in the New York session, as an unexpected fall in the US retail sales data for January and a surprise rise in the weekly US jobless claims during the previous week, spurred fresh concerns on the growth prospect of the US economy.
The Euro is trading higher against the US Dollar, as growth in the Euro-zone economy expanded at a faster pace than expected in the fourth quarter. Additionally, France and Germany, both reported a better than expected economic growth in the fourth quarter, raising hopes of a broader recovery in the region.
The UK Pound today extended its yesterday’s gains arising from BoE Chief Economist, Spencer Dale’s comments about 2015 interest rate hike as UK construction output expanded during the fourth quarter.
Earlier today, in Australia, the Reserve Bank of Australia Assistant Governor, Christopher Kent, welcomed a further depreciation in the Australian Dollar, suggesting that such a scenario would add a little to inflation. Furthermore, he opined that a weaker Aussie could prove beneficial for the economic growth of the nation. Meanwhile, today’s upbeat inflation report from China veered the positive market sentiment towards the Aussie.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3694 against the USD, 0.11% higher from the New York close, as traders cheered better-than-expected fourth-quarter GDP data from the Euro-zone as well as Germany and France. During the session, the pair traded at a high of 1.3714 and a low of 1.3677. Yesterday, the EUR traded 0.07% higher against the USD in the New York session, and closed at 1.3679.
The pair is expected to find its first support at 1.3662 and first resistance at 1.3720.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6702 against the USD, 0.26% higher from the New York close, and hovered near its strongest level since May 2011, as UK construction output increased 0.2% QoQ in the fourth quarter. During the session, the pair traded at a high of 1.6717 and a low of 1.6649. Yesterday, the British Pound finished 0.10% higher versus the Dollar in the New York session, and closed at 1.6658, after the BoE Chief Economist, Spencer Dale, hinted that investors’ bets for an interest-rate hike in the UK economy within two years were reasonable.
The pair is expected to find its first support at 1.6644 and first resistance at 1.6739.
USD JPY
The USD is trading at 101.85 against the JPY at 10:40 GMT this morning, 0.33% lower from the New York close, as investors speculated that US industrial output growth would slow and consumer sentiment would come under pressure. During the session, the pair traded at a high of 102.42 and a low of 101.66. In the New York session yesterday, the USD traded 0.16% higher against the JPY, and closed at 102.19.
The pair is expected to find its first support at 101.47 and first resistance at 102.33.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8928 against the Swiss Franc, 0.06% lower from the New York close. During the session, the pair traded at a high of 0.8942 and a low of 0.8914. In the New York session yesterday, the USD traded marginally lower against the CHF, and closed at 0.8933, hurt by a lackluster US retail sales and weekly jobless claims data.
The pair is expected to find its first support at 0.8904 and first resistance at 0.8952.
USD CAD
At 10:40 GMT, the USD is trading at 1.0951 against the CAD, 0.28% lower from the New York close. During the session, the pair traded at a high of 1.0984 and a low of 1.0950. Yesterday, the USD traded 0.08% lower against the CAD in the New York session, and closed at 1.0982. On the economic front, data from Canada showed that new housing price index rose 0.1%, on a monthly basis in December.
The pair is expected to find its first support at 1.0921 and first resistance at 1.1005.
AUD USD
The AUD is trading at 0.9026 against the USD, at 10:40 GMT this morning, 0.61% higher from the New York close. Earlier today, the RBA Assistant Governor, Christopher Kent acknowledged the recent fall in the Aussie and opined that a further deprecation in the local currency would assist the nation’s economic growth. During the session, the pair traded at a high of 0.9045 and a low of 0.8973. AUD traded 0.07% higher against the USD in the New York session, and closed at 0.8971.
The pair is expected to find its first support at 0.8968 and first resistance at 0.9065.
Gold
At 10:40 GMT, Gold is trading at $1310.97 per ounce, 0.65% higher from the New York close. This morning, Gold traded at a high of $1312.65 and a low of $1300.00 per ounce. In the New York session yesterday, the yellow metal traded 0.80% higher, and closed at $1302.50, as investors favored the safe-haven metal amid the latest batch of downbeat US economic data.
Gold has its first support at $1296.56 and first resistance at $1319.01.
Silver
Silver is trading at $20.94 per ounce, 2.19% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.96 and a low of $20.46. Silver traded 1.09% higher against the USD in the New York session, and closed at $20.50, amid a weaker US Dollar.
Silver has its first support at $20.45 and first resistance at $21.20.
Crude Oil
At 10:40 GMT, Oil is trading at $99.90 per barrel, 0.50% lower from the New York close. This morning, Oil traded at a high of $100.47 and a low of $99.78. Yesterday, Oil traded 0.55% higher in the New York session, and closed at $100.36, as a winter storm in the US bolstered the demand prospect of the commodity while a social unrest in Libya weighed on the supply outlook of the commodity.
It has its first support at $99.37 and first resistance at $100.55.
Economic Snapshot
UK construction output rose less than market expectations in December
On an annual basis, construction output in the UK rose 6.3% in December, following a downwardly revised rise of 2.0% recorded in the preceding month. Markets were expecting construction output to rise 6.4% in December.
Euro-zone trade surplus narrowed more than expected in December
On a non-seasonally adjusted basis, Euro-zone trade surplus narrowed to €13.9 billion in December from a revised surplus of €17.0 billion recorded in the previous month. Market had expected the Euro-zone’s trade surplus to narrow to €14.5 billion in December.
Euro-zone economy expanded more than anticipated in Q4 2013
On a seasonally adjusted quarterly basis, the preliminary GDP in the Euro-zone rose 0.3% in Q4 2013, higher than the market estimate of 0.2% rise and compared to a final estimate of growth of 0.1% recorded in the third quarter of 2013. Meanwhile, on a seasonally adjusted annual basis the GDP rose by 0.5% in Q4 2013, compared to a revised decline of 0.3% recorded in the third quarter of 2013.
German economy expanded more than expectations in the fourth quarter of 2013
On a seasonally adjusted quarterly basis, Germany’s GDP rose 0.4% in the Q4 2013, more than market estimates of 0.3% rise and compared to a 0.3% rise reported in the preceding quarter. On a non-seasonally adjusted annual basis, German economy grew 1.3% in the Q4 2013, more than the 1.1% increase recorded in the Q3 2013. On an annual working day adjusted basis, German GDP increased 1.4% in the Q4 2013, compared to a 0.6% rise reported in the previous quarter.
France GDP rises more than expected in Q4 2013
On a quarterly basis, French GDP advanced 0.3% in the fourth quarter of 2013, compared to a revised flat growth in the previous quarter. Markets had expected France’s GDP to rise 0.2% in Q4 2013. On an annual basis, the preliminary French GDP rose 0.8% in the fourth quarter of 2013, after a revised increase of 0.3% recorded in previous quarter.
Italian economy expanded in line with market forecasts in the Q4 2013
On a seasonally and calendar adjusted quarterly basis, GDP in Italy rose 0.1% in the fourth quarter of 2013, in line with market estimates and compared to a flat change reported in the previous quarter. On a seasonally and calendar adjusted annual basis, GDP in Italy dropped 0.8% in the Q4 2013, as compared to a revised fall of 1.9% recorded in the Q3 2013.
Spain CPI fell in line with market estimates in January
Spain’s final consumer price index on an annual basis rose 0.2% in January, following a 0.3% rise recorded in the previous month. Meanwhile, on an annual basis, Spain’s final harmonized consumer prices (HICP) index rose 0.3% in January, compared to similar rise recorded in the previous month.
China consumer price index rose more than market forecasts in January
Consumer price index (CPI) in China rose 2.5% in January on a yearly basis, compared to a similar rise recorded in the previous month. Markets were expecting the consumer price index to increase 2.4% in January. On a monthly basis, the consumer price index in China increased 1.0% in January, compared to a 0.3% rise reported in the previous month. Additionally, on an annual basis, producer price index in China fell 1.6% in January, compared to a 1.4% decline recorded in the previous month.
Happy pips.
Weekly Forex Update
The greenback rose against its key peers last week, after the minutes of the Federal Open Market Committee’s (FOMC) January meeting revealed that policy makers discussed the possibility of raising interest rates in the near future. The minutes also indicated that the central bank will continue tapering monthly bond purchases as the year unfolds.
On Friday, the Dallas Fed President Richard Fisher stated that the US central bank has done enough to support the economy and should continue to reduce the size of its bond-buying programme.
However, the greenback’s gains were capped as another set of dismal US economic data prompted traders to ponder whether the Federal Reserve (Fed) will slow the pace of reductions of its stimulus program. Manufacturing activity in the New York region fell sharply in February, while the Fed Philadelphia manufacturing index deteriorated in February. The number of building permits issued in January dipped more-than-expected by 5.4% and US housing starts plunged 16%. Another report showed that the number of people filing for initial jobless benefits fell less-than-expected for the week ending February 15, while consumer price inflation in the nation rose in line with market expectations in January. On Friday, the National Association of Realtors indicated that US existing home sales fell 5.1% to 4.62 million units last month.
However, the International Monetary Fund (IMF) has cautioned the US and other advanced economies to avoid speedy exit from monetary stimulus, citing that the recovery is still weak and significant downside risks still remain. The agency also urged the European Central Bank (ECB) to slash its key interest rates below zero as it warned that deflation in the Euro-bloc is a key new risk facing the world economy.
In a key development, the Italian center-left leader, Matteo Renzi was sworn in as nation’s new Prime Minister on Saturday.
Elsewhere, commitment by Japan's central bank to carry on with its stimulus package longer than planned weighed on the Yen. In the minutes of the Bank of Japan’s (BoJ) January policy meeting, policy makers stated that bank’s monetary easing measures are not strictly set to end in two years.
The minutes of Bank of England (BoE) showed that the policymakers unanimously decided to leave the key interest rate at 0.50% and quantitative easing at £375 billion.
For the week ending February 21, the Canadian Dollar declined 1.4% against the greenback. The Australian Dollar also lost ground against the greenback on the back of disappointing manufacturing data from China, sparking fears of a slowdown in Asia's largest economy.
EUR USD
Last week, the EUR traded 0.31% higher against the USD and closed at 1.3740, following the release of a mixed set of economic data from the European region. The preliminary manufacturing PMI in Germany, France and the Euro-zone missed market expectations. Additionally, preliminary services PMI in the Euro-zone and France disappointed markets, while service sector activity in Germany rose in February. Consumer confidence in the Euro-area worsened in February, underlining the uneven and fragile recovery in the bloc. The ZEW sentiment indices in Germany and the Euro-zone revealed that economic sentiment unexpectedly deteriorated in February. However, the current situation index in Germany improved more-than-expected. Another set of data revealed that current account surplus in the Euro-zone stood at record €221.3 billion for 2013, while construction output in the bloc recovered in December after declining for three consecutive months. During the week, the pair traded at a high of 1.3774 and a low of 1.3685. The pair is expected to find its first support at 1.3692, with the next support expected at 1.3644. The first resistance is at 1.3781 and the next at 1.3822.
Investors will keep a tab on the string of European macro reports later this week for further direction.
GBP USD
In the last week, GBP traded 0.59% lower against the USD and closed at 1.6638, following a dismal set of macroeconomic data from the UK, raising concerns over the pace of economic recovery in the nation. The consumer price inflation in the UK fell to 1.9% in January, below the central bank's 2% target. Meanwhile, the ILO unemployment rate surprisingly rose to 7.2% for the three months to December. However, the number of people claiming jobless benefits continued to slide at a stable pace. Also, retail sales declined more than expected in January. The housing data released last week showed an increase in house prices in the UK, raising concerns that a housing bubble could develop in 2014. Meanwhile, the minutes of the BoE’s latest monetary policy meeting offered no significant insights into the near term direction of monetary policy. The pair traded at a high of 1.6824 and a low of 1.6612 in the previous week. GBPUSD is expected to find its first support at 1.6559, with the next at 1.6479. Resistance exists first at 1.6771, and then at 1.6903.
Sterling is expected to take further cues from the outcome of fourth quarter GDP and January’s mortgage approvals data from the UK.
USD JPY
The USD traded 0.79% higher against the JPY over the past week, closing at 102.64. Disappointing economic data released in Japan last week proved a dampener for the local Yen. Nation posted a record merchandise trade deficit of ¥2.8 trillion in January, as growth in exports was outstripped by a surge in import costs. Another data showed that industrial production increased at a weaker pace than earlier estimated in December, while Japan's all industry activity dropped unexpectedly. Also nation’s leading index rose less than initially estimated in December. The Yen also came under pressure after the BoJ indicated in the minutes of latest policy meeting that its stimulus program could continue for longer than the two years initially stated. The pair traded at a high of 102.84 and a low of 101.38. The pair is expected to find its first support at 101.73, with the next support expected at 100.83. The first resistance is at 103.19 and the next at 103.75.
Going forward, investors have their plate full with a raft of economic data including Japan’s inflation, retail trade and industrial production data.
USD CHF
USD traded 0.48% lower against the CHF and closed at 0.8877 in the last week. The Swiss Franc rose following the release of few positive economic data in Switzerland. In economic news, trade surplus surged in January driven by higher exports. Exports grew at a faster than earlier pace of 2.5% (MoM) in January, while imports declined for the first time in three months. A separate report revealed that the ZEW-CS indicator of economic expectations declined to a reading of 28.7 in February from 36.4 in January, while the current conditions index dropped to 47.6 in February. During the period, the pair traded at a high of 0.8930 and a low of 0.8855. The first support is at 0.8845, and the next at 0.8812. Resistance exists first at 0.8920, and then at 0.8962.
In the week ahead, market participants’ will eye fourth quarter growth data from Switzerland along with the UBS consumption and KOF leading indicator for January.
USD CAD
Last week, the USD traded 1.37% higher against the CAD and closed at 1.1121. The Statistics Canada reported that retail sales in Canada tumbled 1.8% in December, from a 0.5% rise recorded in November. Analysts had expected retail sales to decline 0.4%. The agency also reported that nation’s consumer price index rose 1.5% (YoY) in January, slightly higher than the 1.3% rise expected but below the BoC's target of 2%. The BoC Governor, Stephen Poloz indicated that he remains concerned about the state of the Canadian economy in the wake of the financial crisis. However, he further added that the local currency’s sharp decline in recent time versus the USD is a welcome development, since it signals growing momentum in its biggest trading partner, the US. The pair traded at a high of 1.1197 and a low of 1.0907 in the previous week. The first support is at 1.0953, with the next at 1.0785. The first resistance is at 1.1243, while the next is at 1.1365.
Ahead in the week, traders would focus on the Canadian gross domestic product data to be released by the Statistics Canada.
AUD USD
AUD traded 0.72% lower against the USD last week, and closed at 0.8967, following the release of another set of disappointing data from China, Australia’s biggest trading partner. The HSBC flash manufacturing purchasing managers' index (PMI) in China fell to a seven-month low of 48.3 in February. Moreover, the MNI business confidence index in China declined to a 5-year low of 50.2 in February. The minutes of the Reserve Bank of Australia’s latest policy meeting revealed that interest rates in the nation are likely to remain steady at present levels in the near term. However, the bank indicated that economic growth will remain subdued through 2014 and cautioned that improvements in the labor market will take time. During the week, the pair traded at a high of 0.9083 and a low of 0.8935. The first support is at 0.8907, and the next at 0.8847. The first resistance is at 0.9055, and the next at 0.9143.
In the absence of major economic data ahead this week from Australia, market participants will keep a tab on global economic news for further direction.
Gold
In the prior week, Gold traded 0.42% higher against the USD and closed at USD1324.28, following another set of mostly weaker-than-expected US economic data. However, gains were capped as the minutes of the Fed’s January policy meeting highlighted the possibility of an increase in interest rates earlier-than-expected. The yellow metal traded at a high of 1332.45 and a low of 1307.41 in the previous week. Gold is expected to find support at 1310.31 and the next at 1296.34. The first resistance is at 1335.35, while the next is at 1346.42.
In the week ahead, market participants will continue to pay close attention to US economic data for further indications on the strength of the economy and the future course of monetary policy.
Oil
Oil prices traded 1.89% higher against the USD in the last week and closed at USD102.20, amid speculation that weather conditions in the US Northeast will boost demand for oil. In a key development, reports indicated that Iran’s top two oil customers, China and India boosted their imports in January. Last week, the American Petroleum Institute reported a decline of 473,000 barrels in the US crude inventories for the week ended February 14. Analysts had forecast a climb of 1.9 million barrels in crude supplies. Meanwhile, the Energy Information Administration indicated that crude stockpiles rose 1 million barrels for the week ended February 14, against the expectations for a climb of 1.9 million barrels. Oil traded at a high of 103.80 and a low of 100.45 in the previous week. Oil has its first major support at 100.50, while the next support exists at 98.80. The first resistance is at 103.85 and the next at 105.50.
In the week ahead, traders would pay close attention to the US economic data for further directions to the oil prices.
Happy pips.