Forex Market Update
This morning, the greenback is trading mostly lower against most of the major currencies, ahead of the FOMC minutes and a planned speech by the Fed Chief, Janet Yellen.
The GBP is trading higher against the USD, after UK’s retail sales rose more-than-expected in April and as the minutes of the BoE’s latest policy meeting fuelled expectations of an earlier-than-expected hike in the nation’s benchmark interest rate. Yesterday, BoE’s Charlie Bean hinted that BoE’s exit from its stimulus measures would not be as easy as expected.
The JPY gained ground after the BoJ refrained from expanding its stimulus measures by keeping its policy measures intact at its policy meeting. Meanwhile, the BoJ Governor, Kuroda, noting the recent gains in the Yen, opined that there were absolutely no reasons for the Yen to strengthen.
Yesterday, in the New York session, the greenback traded mostly lower against the key currencies. Late Tuesday, Fed’s Charles Plosser indicated that the US economy currently is on a much firmer footing than it has been in several years while another Fed official, William Dudley projected interest rate in the nation to rise relatively slower based on the economy’s progress.
In the Euro-zone, ECB’s Erkki Liikanen hinted that the central bank was open to non-traditional policy measures such as QE to fight deflation threats in the region.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3704 against the USD, a tad higher from the New York close. In economic news, Euro-zone’s current account surplus narrowed to a seasonally adjusted €18.8 billion in March. During the session, the pair traded at a high of 1.3712 and a low of 1.3701. Yesterday, the EUR ended the New York session flat against the USD, and closed at 1.3701. An ECB policymaker, Erkki Liikanen, indicated that the central bank is willing to deploy measures like QE if deflation risks materialize in the region.
The pair is expected to find its first support at 1.3686 and first resistance at 1.3723.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6887 against the USD, 0.29% higher from the New York close, as annual retail sales in the UK rose at the fastest pace in 10 years in April while minutes from the BoE’s May policy meeting hinted that UK policymakers were moving closer to vote for an earlier-than-expected interest rate hike in the economy. During the session, the pair traded at a high of 1.6851 and a low of 1.6835. Yesterday, the British Pound traded a tad higher versus the Dollar in the New York session, and closed at 1.6838.
The pair is expected to find its first support at 1.6832 and first resistance at 1.6933.
USD JPY
The USD is trading at 100.98 against the JPY at 9:40 GMT this morning, 0.31% lower from the New York close, as the latter advanced after the BoJ kept its monetary policy intact and indicated that it anticipates a modest recovery in the nation. During the session, the pair traded at a high of 101.41 and a low of 100.98. In the New York session yesterday, the USD traded 0.08% lower against the JPY, and closed at 101.30.
The pair is expected to find its first support at 100.72 and first resistance at 101.36.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8917 against the Swiss Franc, marginally lower from the New York close. Earlier today, data showed that the growth of M3 supply on an annual basis in the Swiss economy slowed in April after accelerating for three successive months. During the session, the pair traded at a high of 0.8923 and a low of 0.8912. In the New York session yesterday, the USD traded marginally lower against the CHF, and closed at 0.8920.
The pair is expected to find its first support at 0.8900 and first resistance at 0.8932.
USD CAD
At 9:40 GMT, the USD is trading at 1.0907 against the CAD, flat from the New York close. During the session, the pair traded at a high of 1.0915 and a low of 1.0903. Yesterday, the USD traded slightly higher against the CAD in the New York session, and closed at 1.0907, as the Loonie declined following data that showed Canada’s wholesale sales dropped unexpectedly in March, from a record-high level in the previous month.
The pair is expected to find its first support at 1.0884 and first resistance at 1.0924.
AUD USD
The AUD is trading at 0.9241 against the USD, at 9:40 GMT this morning, slightly lower from the New York close, after the Westpac consumer confidence in Australia deteriorated to the lowest level since August 2011 in May and following a decline in iron ore prices. Meanwhile Australia’s wage price index rose at a steady rate in the Q1 of 2014. During the session, the pair traded at a high of 0.9246 and a low of 0.9225. AUD traded 0.17% lower against the USD in the New York session, and closed at 0.9242.
The pair is expected to find its first support at 0.9212 and first resistance at 0.9272.
Gold
At 9:40 GMT, Gold is trading at $1292.80 per ounce, 0.12% lower from the New York close, as data showed that holdings in the SPDR Gold Trust fell to the lowest level since December 2008 on Tuesday. This morning, Gold traded at a high of $1296.30 and a low of $1291.60 per ounce. In the New York session yesterday, the yellow metal traded 0.47% higher, and closed at $1294.40, as a decline in the US equity markets bolstered the safe-haven appeal of the metal and after the World Gold Council indicated that global gold demand remained robust in the first quarter of 2014.
Gold has its first support at $1286.80 and first resistance at $1298.00.
Silver
Silver is trading at $19.43 per ounce, 0.13% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.50 and a low of $19.37. Silver traded 0.70% higher against the USD in the New York session, and closed at $19.40, tracking gains in the prices of gold.
Silver has its first support at $19.27 and first resistance at $19.54.
Crude Oil
At 9:40 GMT, Oil is trading at $103.12 per barrel, 0.20% higher from the New York close, ahead of EIA weekly report on the US crude inventories. This morning, Oil traded at a high of $103.25 and a low of $102.78. Yesterday, Oil traded 0.34% higher in the New York session, and closed at $102.93 after the API reported a 10.3 million barrels fall in the weekly US crude supplies.
It has its first support at $102.40 and first resistance at $103.55.
Economic Snapshot
UK retail sales climbed more than expected in April
On a monthly basis, retail sales in the UK rose 1.3% in April, compared to a revised 0.5% rise recorded in the previous month. Markets were expecting retail sales to rise 0.5% in April.
BoE MPC members voted unanimously to keep the monetary policy unchanged, indicated BoE minutes
The minutes of the Bank of England’s (BoE) monetary policy meeting held on 07 and 08 May 2014 indicated that the central bank officials voted unanimously to keep the benchmark interest rate unchanged at 0.5% and maintain the assets purchase programme at £375.0 billion.
Euro-zone current account surplus widened more than expected in March
On a non-seasonally adjusted basis, the Euro-zone posted a current account surplus of €20.9 billion in March, compared to a revised surplus of €13.8 billion recorded in the previous month. Markets were expecting the non-seasonal adjusted current account surplus to widen to €20.0 billion in March.
Swiss M3 money supply rose at a slower pace in April
On an annual basis, M3 money supply in Switzerland rose 8.0% in April, compared to a revised 9.1% rise recorded in the previous month.
BoJ kept its key interest rate and monetary policy unchanged
The Bank of Japan (BoJ) in its latest monetary policy statement stated that it has held its key interest rate in the range of 0.0 to 0.1% unchanged and has maintained its ultra-loose monetary policy steady. The BoJ also kept its view on the economy unchanged by stating that it expects the nation to continue recovering at a moderate pace.
Japan’s economy to continue to recover moderately, indicated BoJ’s Kuroda
The Bank of Japan (BoJ) Governor, Haruhiko Kuroda, opined that the Japanese economic recovery is expected to continue at a moderate pace, with consumer price inflation likely to hit the central bank’s 2% target in 2015.
Australia Westpac consumer confidence declined in May
On a seasonally adjusted monthly basis, the Westpac consumer confidence index in Australia dropped 6.8% in May to a reading of 92.9, compared to a 0.3% increase and a level of 99.7 reported in the previous month.
Australia’s wage price index rose in line with market estimates in Q1 2014
On a seasonally adjusted quarterly basis, the wage price index in Australia rose 0.7% in Q1 2014, in line with market expectations and following a similar increase recorded in the preceding quarter.
Good trades.
