Forex Market Update
This morning the US Dollar continued to rise against its major counterparts, supported by the strong ADP employment data for December released yesterday in the US. Against this backdrop, traders would keenly follow today’s initial jobless claims and tomorrow’s unemployment data for further insights.
However, the greenback’s upward momentum was kept in check after the minutes of FOMC meeting indicated that policymakers remained worried about the low inflation in the nation, despite a general consensus over the recovery in labor market. Additionally, policymakers saw declining benefits of its bond buying programme that led to the central bank to taper its
asset-purchase program. Furthermore, the FOMC voting members decided that future reductions “would be undertaken in measured steps.”
asset-purchase program. Furthermore, the FOMC voting members decided that future reductions “would be undertaken in measured steps.”
European investors are expected to have a busy day today as central banks from the European Union and from the UK are scheduled to meet for the first time in 2014 where they would adjust their respective monetary tools to foster economic activities in their regions.
Meanwhile, improvements in the Euro-zone’s consumer confidence, business climate and services sentiment data kept the Euro trade in the green against the USD and the UK Pound.
Elsewhere in Asia, the Chinese inflation eased in December, providing further room for the policy makers to go ahead with the reforms to foster economic activities in the world’s second largest economy. The Aussie dipped further following the release of dismal local housing report.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3608 against the USD, 0.23% higher from the New York close, as investors awaited for policy decisions by the European Central Bank, paring some its yesterday’s losses when the greenback broadly strengthened amid speculations over more tapering by the Federal Reserve. In economic news, consumer confidence, business climate and services sentiment showed signs of improvements in December, whereas, industrial production in Germany rebounded in November. During the session, the pair traded at a high of 1.3623 and a low of 1.3566. Yesterday, the EUR traded 0.09% lower against the USD in the New York session, and closed at 1.3577.
The pair is expected to find its first support at 1.3566 and first resistance at 1.3636.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6455 against the USD, marginally higher from the New York close, ahead of the Bank of England’s monetary policy meeting wherein the key officials from the central bank would meet and discuss as to how they can sustain the economic recovery in the UK. On the data front, trade deficit in the UK shrank less than market expectations in November. During the session, the pair traded at a high of 1.6481 and a low of 1.6441. Yesterday, the British Pound traded 0.13% higher versus the Dollar in the New York session, and closed at 1.6449.
The pair is expected to find its first support at 1.6409 and first resistance at 1.6491.
USD JPY
The USD is trading at 104.99 against the JPY at 10:40 GMT this morning, 0.13% higher from the New York close, ahead of the Bank of Japan’s monthly economic survey to be released later tomorrow. During the session, the pair traded at a high of 105.07 and a low of 104.74. In the New York session yesterday, the USD traded marginally higher against the JPY, and closed at 104.85.
The pair is expected to find its first support at 104.74 and first resistance at 105.15.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9088 against the Swiss Franc, 0.25% lower from the New York close, ahead of the Swiss jobs and consumer prices data to be released later tomorrow. During the session, the pair traded at a high of 0.9125 and a low of 0.9073. In the New York session yesterday, the USD traded marginally higher against the CHF, and closed at 0.9111.
The pair is expected to find its first support at 0.9065 and first resistance at 0.9120.
USD CAD
At 10:40 GMT, the USD is trading at 1.0838 against the CAD, 0.12% higher from the New York close, ahead of the Canadian housing data to be released later during the day, which would indicate the strength of the Canadian housing market. Meanwhile, tomorrow’s employment data from Canada would be closely followed by investors to get a fair idea about the health of the Canadian economy. During the session, the pair traded at a high of 1.0847 and a low of 1.0817. Yesterday, the USD traded 0.16% higher against the CAD in the New York session, and closed at 1.0825.
The pair is expected to find its first support at 1.0802 and first resistance at 1.0861.
AUD USD
The AUD is trading at 0.8882 against the USD, at 10:40 GMT this morning, 0.22% lower from the New York close, after building permits in Australia dropped more than market expected, highlighting continued weakness in the domestic housing market. The Aussie also fell after nation’s biggest trading partner China, posted disappointing consumer price inflation data. However, a better than expected domestic retail sales data kept the losses under check. During the session, the pair traded at a high of 0.8915 and a low of 0.8864. AUD traded 0.34% lower against the USD in the New York session, and closed at 0.8902.
The pair is expected to find its first support at 0.8846 and first resistance at 0.8935.
Gold
At 10:40 GMT, Gold is trading at $1227.22 per ounce, 0.11% higher from the New York close. This morning, Gold traded at a high of $1230.00 and a low of $1224.43 per ounce. In the New York session yesterday, the yellow metal traded 0.32% lower, and closed at $1225.90, as the greenback strengthened following a strong US jobs data that took the sheen off the metal's safe-haven appeal.
Gold has its first support at $1219.90 and first resistance at $1233.28.
Silver
Silver is trading at $19.58 per ounce, 0.26% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $19.71 and a low of $19.45. Silver traded 0.82% lower against the USD in the New York session, and closed at $19.53.
Silver has its first support at $19.35 and first resistance at $19.78.
Crude Oil
At 10:40 GMT, Oil is trading at $92.77 per barrel, 0.30% higher from the New York close, as bargain hunters returned to the market to grab cheap valuations after crude oil prices fell yesterday. This morning, Oil traded at a high of $92.85 and a low of $92.33. Yesterday, Oil traded 1.54% lower in the New York session, and closed at $92.49. The Energy Information Administration reported a decline of 2.7 million barrels in the US crude oil stock piles for the week ended January 3.
It has its first support at $92.00 and first resistance at $93.81.
Economic Snapshot
UK trade deficit narrowed less than expected in November
The total trade deficit of the UK narrowed to £3.24 billion in November, from a revised deficit of £3.50 billion recorded in the previous month. Markets had expected the UK trade deficit to narrow down to £2.30 billion in November.
Euro-zone consumer confidence improved as previously estimated in December
The consumer confidence in the Euro-zone improved to a level of -13.6 in December, in line with preliminary expectations and from a level of -15.4 reported in the preceding month. Additionally, industrial confidence climbed to a level of -3.4 in December, trailing the market expectations for a reading of -3.3 and from a level of -3.9 reported in the preceding month. The economic sentiment indicator advanced to a level of 100.0 in December, from a downwardly revised reading of 98.4 reported in the preceding month. The services sentiment indicator rose to a reading of 0.2 in December from a downwardly revised level of -0.9 reported in the previous month. Meanwhile, the business climate indicator dropped to a level of 0.27 in December, from an upwardly revised level of 0.31 recorded in the previous month.
German industrial production rebounded more than forecast in November
On a seasonally adjusted monthly basis, industrial production in Germany rose 1.9% in November, following a 1.2% fall recorded in the preceding month. Markets had expected industrial production to rise 1.5% in November.
France trade deficit widened unexpectedly in November
France’s trade deficit widened to €5.7 billion in November, against a revised deficit of €4.8 billion recorded in the preceding month. Markets had expected France’s trade deficit to narrow to €4.6 billion in November.
Italian public deficit to GDP ratio dropped in Q3 2013
The deficit to GDP (YTD) ratio in Italy dropped to 3.7% in the third quarter of 2013, compared to a ratio of 4.1% recorded in the previous three months of 2013.
Tokyo average office vacancies advanced at a slower pace in December
The average office vacancies in Tokyo rose 7.34% in December, slower compared to a 7.52% increase recorded in the previous month.
Australia retail sales advanced at a faster pace in December
On a seasonally adjusted monthly basis, retail sales in Australia climbed 0.7% in December, compared to a 0.5% increase recorded in the preceding month. Markets were expecting retail sales to rise 0.4% in December.
Australia building approvals climbed at a slower pace in November
On a seasonally adjusted monthly basis, building approvals in Australia declined 1.5% in November, compared to a revised 1.6% decrease recorded in the previous month.
Chinese consumer price inflation rose at a slower pace in December
Happy pips
