Forex Market Update
This morning, the greenback is trading mostly higher against most of the major currencies, ahead of the US ADP employment and service PMI data.
The EUR is trading lower as the latest batch of soft PMI data from the Euro-zone and its member nations weighed on the growth-outlook of the region, adding to speculation that the ECB would further ease its monetary policy at its meeting scheduled tomorrow. However, GDP in the 18-nation currency bloc rose at an expected annual pace in the first quarter 2014.
The GBP pared some of its initial losses after the Markit Economics reported that activities in UK’s service sector continued to remain in the expansion territory last month, even as it’s PMI ticked down to a reading of 58.6 in May from 58.7 in April.
Yesterday, in the New York session, the greenback traded mostly higher against the key currencies, as factory orders in the US rose for a third consecutive month in April. Adding to the bullish sentiment were comments from Fed’s Esther George, who urged the central bank to raise its interest rate at a “sooner and faster pace.”
In a noteworthy event, World Bank’s Managing Director, Bertrand Badre indicated that, despite the severe harsh winter in the US and prolonged low level of inflation in the Euro-zone, the bank does not expect a major change in its global growth forecast of 3.2% this year.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3614 against the USD, 0.10% lower from the New York close. In economic news, Euro-zone’s composite PMI eased more-than-expected in May but remained in the expansion territory for the eleventh straight month. Separately, data confirmed that Euro-bloc’s GDP rose at an expected pace in the first-quarter. During the session, the pair traded at a high of 1.3630 and a low of 1.3607. Yesterday, the EUR traded 0.06% lower against the USD in the New York session, and closed at 1.3628.
The pair is expected to find its first support at 1.3593 and first resistance at 1.3642.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6736 against the USD, 0.08% lower from the New York close. However, the GBP pared some of its initial losses after data revealed that activities in the UK’s service sector decelerated at a slower pace than expected in May. Also earlier today the BRC shop prices in the UK fell for the thirteenth consecutive month in the previous month. During the session, the pair traded at a high of 1.6750 and a low of 1.6705. Yesterday, the British Pound traded a tad lower versus the Dollar in the New York session, and closed at 1.6749.
The pair is expected to find its first support at 1.6700 and first resistance at 1.6770.
USD JPY
The USD is trading at 102.61 against the JPY at 9:40 GMT this morning, 0.07% higher from the New York close. Data released overnight showed that Japan’s service sector PMI rose to a reading of 49.3 in May, just short of the 50.0 threshold mark of expansion. During the session, the pair traded at a high of 102.81 and a low of 102.54. In the New York session yesterday, the USD traded 0.14% higher against the JPY, and closed at 102.54.
The pair is expected to find its first support at 102.33 and first resistance at 102.85.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8967 against the Swiss Franc, a tad higher from the New York close. Amid lack of major economic releases from the Swiss economy, later today, traders would eye global economic news for further cues in the currency pair. During the session, the pair traded at a high of 0.8984 and a low of 0.8964. In the New York session yesterday, the USD traded 0.06% higher against the CHF, and closed at 0.8965.
The pair is expected to find its first support at 0.8951 and first resistance at 0.8984.
USD CAD
At 9:40 GMT, the USD is trading at 1.0936 against the CAD, 0.25% higher from the New York close. Market participants keenly await the BoC’s interest rate decision and Canada’s trade balance data for further guidance in the Loonie. During the session, the pair traded at a high of 1.0944 and a low of 1.0911. Yesterday, the USD traded 0.10% lower against the CAD in the New York session, and closed at 1.0909.
The pair is expected to find its first support at 1.0911 and first resistance at 1.0952.
AUD USD
The AUD is trading at 0.9273 against the USD, at 9:40 GMT this morning, 0.06% higher from the New York close, as data revealed that Australia’s GDP rose at its fastest pace in nearly two years in the first quarter of 2014. Separately, the AiG reported that activities in Australian service sector improved but failed to enter the expansion territory in May. During the session, the pair traded at a high of 0.9300 and a low of 0.9258. AUD traded 0.11% higher against the USD in the New York session, and closed at 0.9267.
The pair is expected to find its first support at 0.9244 and first resistance at 0.9301.
Gold
At 9:40 GMT, Gold is trading at $1245.90 per ounce, marginally higher from the New York close. This morning, Gold traded at a high of $1247.10 and a low of $1243.70 per ounce. In the New York session yesterday, the yellow metal traded marginally higher, and closed at $1245.30, as a weakness in the US equity markets bolstered the safe-haven appeal of the metal.
Gold has its first support at $1241.43 and first resistance at $1249.13.
Silver
Silver is trading at $18.80 per ounce, 0.05% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $18.84 and a low of $18.74. Silver traded 0.08% lower against the USD in the New York session, and closed at $18.79, amid soft demand for industrial metals.
Silver has its first support at $18.71 and first resistance at $18.88.
Crude Oil
At 9:40 GMT, Oil is trading at $103.42 per barrel, 0.60% higher from the New York close. Earlier today, reports showed that Libya’s daily oil output increased as protests at its Zelten and Raguba oil fields ended. This morning, Oil traded at a high of $103.44 and a low of $102.69. Yesterday, Oil traded 0.24% higher in the New York session, and closed at $102.80, as the API reported a more-than-expected 1.4 million barrels decline in the US crude inventories last week.
It has its first support at $102.62 and first resistance at $103.83.
Economic Snapshot
UK services PMI declined less than expected in May
Markit services Purchasing Managers’ Index (PMI) in the UK eased to a reading of 58.6 in May, compared to a reading of 58.7 reported in the previous month. Markets had expected the index to decline to a reading of 58.2 in May.
Euro-zone PPI declined as expected in April
On an annual basis, the producer price index (PPI) in the Euro-zone fell 1.2% in April, in line with market estimates and compared to a 1.6% decline recorded in the previous month.
Euro-zone economy grew in line with the preliminary estimate in Q1 2014
On a seasonally adjusted quarterly basis, the GDP in the Euro-zone rose 0.2% in the first quarter of 2014, in line with the preliminary estimate and compared to a similar pace of rise recorded in the previous quarter.
Euro-zone composite PMI declined more than the preliminary estimate in May
Markit final composite PMI in the Euro-zone declined to a reading of 53.5 in May from a level of 54.0 recorded in April, more than the preliminary estimate of a level of 53.9. Meanwhile, the final services PMI in the Euro-zone rose to a reading of 53.2 in May from a level of 53.1 recorded in April, but less than the preliminary estimate of a level of 53.5.
German services PMI increased less than the preliminary estimate in May
Markit Economics reported that the final services PMI in Germany rose to a reading of 56.0 in May from a level of 54.7 recorded in April, but less than the preliminary estimate of a level of 56.4.
France’s final services PMI declined more than the preliminary estimate in May
The final Markit services Purchasing Managers’ Index (PMI) in France declined to a reading of 49.1 in May, more than the preliminary reading of 49.2, compared to a the final reading of 50.4 in the previous month.
Italian services PMI increased in May
Markit Economics reported that the services Purchasing Managers’ Index (PMI) in Italy increased to a reading of 51.6 in May, compared to a reading of 51.1 reported in the previous month.
Spain services PMI fell in May
The Markit services Purchasing Managers’ Index (PMI) in Spain declined to a reading of 55.7 in May from a reading of 56.5 in the previous month.
Australia GDP rose more than expected in the Q1 2014
On a seasonally adjusted annual basis, GDP in Australia rose 3.5% in the first quarter of 2014, more than market estimates of a rise of 3.2% and compared to a revised 2.7% increase recorded in the fourth quarter of 2013.
China leading index rose in April
The leading index in China rose to a level of 100.11 in April, compared to a revised reading of 99.75 recorded in the previous month.
Good trades.
