Forex Market Update
This morning, the greenback is trading mostly lower against most of the major currencies.
The JPY trimmed its initial gains against the USD after Russia withdrew its military troops from Ukraine and after the BoJ Governor, Haruhiko Kuroda indicated that low interest rates in Japan is accelerating growth in the yen carry trade.
The GBP is trading higher against the USD. However gains were limited after the UK construction activity slowed last month, as the difficult weather conditions hit housebuilding.
Earlier today, in Australia, the RBA kept its benchmark interest rate unchanged at 2.5% and reiterated its earlier stance for a period of stability in interest rates. Separately, RBA Governor, Glen Stevens opined that a weakness in the domestic currency could help balanced economic growth in the nation.
Yesterday, in the New York session, the USD traded mostly higher against the key currencies after data indicated that the manufacturing PMI in the US rose at a faster pace than market expectations for February.
The EUR declined against the USD as traders refrained from taking riskier bets in the currency. Separately, the ECB Chief, Mario Draghi stated that the recent 0.8% rise in the region’s CPI index was “way below” the central bank’s inflation target. Furthermore, he opined that persistent low level of inflation in the region could make it harder for the economy to achieve its 2% goal.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3751 against the USD, 0.11% higher from the New York close. On the macro front, producer prices in the Euro-zone on a yearly basis fell at the fastest rate since the end of 2009 in January. During the session, the pair traded at a high of 1.3774 and a low of 1.3726. Yesterday, the EUR traded 0.25% lower against the USD in the New York session, and closed at 1.3736. The ECB President, Mario Draghi expressed concerns on the recent CPI data and opined that persistent low inflation could make it harder for the Euro-zone to achieve the ECB’s 2% inflation target.
The pair is expected to find its first support at 1.3719 and first resistance at 1.3784.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6679 against the USD, 0.08% higher from the New York close, despite the construction PMI in the UK registering a more-than-expected fall in February, hurt by unfavorable climatic conditions in the nation. During the session, the pair traded at a high of 1.6718 and a low of 1.6646. Yesterday, the British Pound traded 0.39% lower versus the Dollar in the New York session, and closed at 1.6665, as the greenback advanced on the back of upbeat US ISM manufacturing PMI data and strong demand for safe-haven assets.
The pair is expected to find its first support at 1.6630 and first resistance at 1.6738.
USD JPY
The USD is trading at 101.77 against the JPY at 10:40 GMT this morning, 0.34% higher from the New York close. The Yen lost its safe haven appeal after Russia ended military strikes in Ukraine’s Crimea region. Adding to the negative sentiment were comments from the BoJ Governor, Kuroda, who opined that low interest rates in the nation is facilitating growth in yen carry trade. During the session, the pair traded at a high of 101.96 and a low of 101.44. In the New York session yesterday, the USD traded marginally higher against the JPY, and closed at 101.42.
The pair is expected to find its first support at 101.32 and first resistance at 102.09.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8846 against the Swiss Franc, 0.15% higher from the New York close. During the session, the pair traded at a high of 0.8849 and a low of 0.8831. In the New York session yesterday, the USD traded 0.26% higher against the CHF, and closed at 0.8833.
The pair is expected to find its first support at 0.8809 and first resistance at 0.8866.
USD CAD
At 10:40 GMT, the USD is trading at 1.1084 against the CAD, 0.05% higher from the New York close. During the session, the pair traded at a high of 1.1104 and a low of 1.1077. Yesterday, the USD traded 0.18% lower against the CAD in the New York session, and closed at 1.1078. In economic news industrial product price and raw material price index in Canada surpassed analysts’ expectations for January.
The pair is expected to find its first support at 1.1065 and first resistance at 1.1107.
AUD USD
The AUD is trading at 0.8948 against the USD, at 10:40 GMT this morning, 0.16% higher from the New York close. Early morning, the RBA kept its interest rate unchanged at 2.5% and opined that a weaker Aussie could help achieve balanced growth in the economy. Separately data showed that building permits in Australia surged more than market expectations by 34.6% (YoY) in January. During the session, the pair traded at a high of 0.8970 and a low of 0.8919. AUD traded 0.19% higher against the USD in the New York session, and closed at 0.8934.
The pair is expected to find its first support at 0.8910 and first resistance at 0.8978.
Gold
At 10:40 GMT, Gold is trading at $1337.51 per ounce, 0.90% lower from the New York close, as demand for safe-haven assets declined after Russian President, Vladimir Putin ordered troops to return from Ukraine borders. This morning, Gold traded at a high of $1352.68 and a low of $1336.58 per ounce. In the New York session yesterday, the yellow metal traded 0.30% higher, and closed at $1349.68, as tension over Ukraine escalated after Russian forces took control over Ukraine’s Crimean peninsula.
Gold has its first support at $1331.10 and first resistance at $1349.39.
Silver
Silver is trading at $21.25 per ounce, 0.79% lower from the New York close, at 10:40 GMT this morning, as easing concerns on Ukraine crisis weighed on the demand outlook of safe-haven assets. This morning, Silver traded at a high of $21.53 and a low of $21.17. Silver traded 0.21% lower against the USD in the New York session, and closed at $21.42, mirroring losses in the prices of industrial metals.
Silver has its first support at $21.06 and first resistance at $21.54.
Crude Oil
At 10:40 GMT, Oil is trading at $103.74 per barrel, 1.10% lower from the New York close, as concerns over Ukraine crisis receded following Russia’s decision to withdraw its troop from Ukraine borders. This morning, Oil traded at a high of $104.96 and a low of $103.60. Yesterday, Oil traded slightly higher in the New York session, and closed at $104.88, as tension in Ukraine and chilly weather in the US bolstered the demand-outlook of the commodity.
It has its first support at $103.15 and first resistance at $104.77.
Economic Snapshot
UK construction PMI fell more than expected in February
The construction Purchasing Managers’ Index (PMI) in the UK fell to a reading of 62.6 in February, following a reading of 64.6 in the previous month. Markets had expected the index to fall to a reading of 63.2.
Euro-zone producer price index fell more than expected in January
On an annual basis, producer price index in the Euro-zone fell 1.4% in January, compared to 0.8% fall in the previous month. Markets were expecting the producer price index to fall 1.3% in January.
Unemployment in Spain fell unexpectedly in February
The number of people unemployed in Spain dropped by 1.9K in February, compared to a rise 113.1K reported in the previous month. Market had expected the unemployment to rise by 74.2K in February.
Japan’s labor cash earnings declined unexpectedly in January
On an annual basis, labor cash earnings in Japan dropped 0.2% in January, compared to a revised 0.5% increase recorded in the previous month. Market had expected Japan’s labor cash earnings to rise 0.3% in January.
Australia building approvals rose more than expected in January
On a seasonally adjusted monthly basis, building approvals in Australia rose 6.8% in January, compared to a revised 1.3% decline in the previous month. Markets were expecting building approvals to rise 0.5% in January.
Australia’s current account deficit narrowed less than anticipated in the Q4 2013
Australia’s seasonally adjusted current account deficit narrowed to A$ 10.1 billion in Q4 2013, less than market forecasts and from a revised deficit of A$ 12.5 billion recorded in the previous quarter.
RBA maintained its key interest rate steady
The Reserve Bank of Australia (RBA) kept its key interest rate unchanged at 2.50%, in line with market expectations. The RBA Governor, Glenn Stevens, reiterated that interest rates could remain at the current levels in the near future, given the improving domestic and global economic prospects.
Happy pips.
