This morning the greenback is trading higher, as the recent set of US macro-economic data continued to support speculation that the Fed might trim its current stimulus measures. However, yesterday’s subdued consumer price inflation data for November pointed towards downward pressure on consumer prices in the US. With this in mind, it remains to be seen if the outgoing Fed chief decides to pull the trigger on his QE3 measures at its last meeting for 2013.
While the Fed decision is likely to be highlight of today’s session, reports on US housing starts and building permits would also draw the market attention.
The Euro moved southwards against the greenback, after the German IFO indices showed mixed readings in December, signaling uncertainty in the German economy.
The economic recovery in the UK tightened its roots after the nation’s labor market showed further signs of improvements in October as the claimant count in the nation continued to decline and the unemployment rate inched closer to the 7% threshold rate set by the Bank of England (BoE). Separately, the release of the BoE’s policy meeting’s minutes revealed that the lawmakers unanimously left its monetary easing tools unchanged.
The Swiss Franc failed to gain ground against the greenback despite the Swiss ZEW economic expectations improving to a 43-month high.
The Reserve Bank of Australia’s (RBA) Governor, Glenn Stevens, in his last public appearance for the year, voiced that the central bank is open to bring further reductions in the key lending rates, as an exchange rate for the currency above 90 US cents remains a cause of concern for the nation’s economy.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3748 against the USD, 0.13% lower from the New York close, as investors awaited the outcome of the Federal Reserve's highly anticipated policy meeting later in the day and as Germany's Ifo business confidence indices for December did little to push the EUR higher. Separately, data released this morning indicated that construction output in the Euro-zone dropped 1.2% (MoM) in October. During the session, the pair traded at a high of 1.3779 and a low of 1.3743. Yesterday, the EUR traded 0.12% higher against the USD in the New York session, and closed at 1.3766.
The pair is expected to find its first support at 1.3720 and first resistance at 1.3777.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6358 against the USD, 0.58% higher from the New York close, after the jobless claims in the nation dropped further in October, while the jobless rate showed yet another improvement. Separately, the minutes of the BoE’s latest policy meeting indicated that MPC members voted unanimously on rate and asset purchases, indicating that the recent data had continued to suggest “a burgeoning recovery” in Britain and the members still expects that the gross domestic product will rise in the final quarter. During the session, the pair traded at a high of 1.6366 and a low of 1.6261. Yesterday, the British Pound traded tad lower versus the Dollar in the New York session, and closed at 1.6263.
The pair is expected to find its first support at 1.6260 and first resistance at 1.6411.
USD JPY
The USD is trading at 102.98 against the JPY at 10:40 GMT this morning, 0.28% higher from the New York close. The Yen lost ground after the trade deficit in Japan widened further in November. During the session, the pair traded at a high of 103.05 and a low of 102.56. In the New York session yesterday, the USD traded 0.26% lower against the JPY, and closed at 102.69.
The pair is expected to find its first support at 102.63 and first resistance at 103.19.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8889 against the Swiss Franc, 0.44% higher from the New York close. On the economic front, the ZEW expectations survey in Switzerland stood at a reading of 39.4 in December, compared to a reading of 31.6 in the previous month. During the session, the pair traded at a high of 0.8905 and a low of 0.8844. In the New York session yesterday, the USD traded 0.30% lower against the CHF, and closed at 0.8850.
The pair is expected to find its first support at 0.8848 and first resistance at 0.8914.
USD CAD
At 10:40 GMT, the USD is trading at 1.0619 against the CAD, 0.12% higher from the New York close, with investors preparing for a decision from the Federal Reserve about what it plans to do with its bond-buying program. During the session, the pair traded at a high of 1.0624 and a low of 1.0600. Yesterday, the USD traded 0.18% higher against the CAD in the New York session, and closed at 1.0606. The Canadian manufacturing shipments increased unexpectedly in October.
The pair is expected to find its first support at 1.0588 and first resistance at 1.0637.
AUD USD
The AUD is trading at 0.8911 against the USD, at 10:40 GMT this morning, 0.10% higher from the New York close. Earlier this morning, the RBA Governor, Glenn Stevens, opined that the exchange rate for AUD above 90 US cents is not favorable for the island country’s economy. During the session, the pair traded at a high of 0.8931 and a low of 0.8894. AUD traded 0.25% lower against the USD in the New York session, and closed at 0.8902.
The pair is expected to find its first support at 0.8883 and first resistance at 0.8939.
Gold
At 10:40 GMT, Gold is trading at $1232.44 per ounce, 0.09% higher from the New York close, ahead of a keenly awaited policy announcement from the Federal Reserve. This morning, Gold traded at a high of $1237.87 and a low of $1228.77 per ounce. In the New York session yesterday, the yellow metal traded 0.26% lower, and closed at $1231.30.
Gold has its first support at $1225.55 and first resistance at $1241.23.
Silver
Silver is trading at $19.99 per ounce, 0.41% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.05 and a low of $19.84. Silver traded 0.05% lower against the USD in the New York session, and closed at $19.91.
Silver has its first support at $19.75 and first resistance at $20.18.
Crude Oil
At 10:40 GMT, Oil is trading at $97.27 per barrel, 0.10% lower from the New York close, with traders reluctant to take positions ahead of a US Federal Reserve policy decision on a plan to trim its monetary stimulus. This morning, Oil traded at a high of $97.56 and a low of $97.02. Yesterday, Oil traded 0.20% higher in the New York session, and closed at $97.34, after the American Petroleum Institute reported that the US crude oil inventories declined 2.5 million barrels for the week ended 13 December.
It has its first support at $96.88 and first resistance at $97.78.
Economic Snapshot
UK unemployment rate dropped unexpectedly in October
The ILO unemployment rate in the UK fell to 7.4% in October, compared to a rate of 7.6% reported in September. Markets were expecting the rate to remain steady at 7.6% in October. The number of people claiming unemployment benefits in the UK fell by 36.7K in November, compared to a revised fall of 42.8K recorded in the preceding month.
BoE minutes cautioned against Sterling appreciation
The minutes from the Bank of England’s (BoE) December monetary policy meeting revealed that the monetary policy committee (MPC) voted unanimously in favor of maintaining the interest rate at 0.5% and quantitative easing at £375.0 billion. Meanwhile, policymakers expressed their concerns that any further substantial rise in the Pound would pose a risk to the nation’s economic recovery and its recent appreciation would add to disinflationary pressures. The minutes also indicated that the central bank would not tighten policy before the jobless rate hits 7%.
Euro-zone construction output dropped at a faster pace in October
On a monthly basis, construction output in the Euro-zone dropped 1.2% in October, after recording an upwardly revised fall of 0.5% in the previous month.
German IFO business climate advanced as expected in December
IFO business climate index in Germany advanced to a level of 109.5 in December, in line with market forecast and compared to a reading of 109.3 reported in the previous month. Additionally, the IFO business expectations index in Germany rose to a level of 107.4 in December, compared to an upwardly revised reading of 106.4 reported in the preceding month. However, the IFO current assessment index in Germany fell to a level of 111.6 in December, compared to a reading of 112.2 reported in the previous month.
Swiss economic expectations improved in December
The economic expectations index in Switzerland rose to 39.4 in December, from a level of 31.6 recorded in the previous month.
China’s house price index advanced in November
On an annual basis, the house price index in China rose 9.9% in November, compared to a 9.6% rise recorded in the previous month.
Leading economic index in China climbed at a faster pace in November, indicates CB
The Conference Board (CB) leading economic index for China rose 1.4% in November, against an upwardly revised 0.7% increase recorded in the earlier month.
Chinese MNI business sentiment increased in December
