Forex Market Update
This morning, the US Dollar is trading lower as market participants exercised caution ahead of the speeches from the US Federal Reserve’s key officials later during the day, where they might reveal as to how the central bank intends to bring in the changes in its policies during the year. In the previous session the greenback swung between gains and losses, following the release of disappointing domestic data.
The weekly initial jobless benefits dropped unexpectedly in the previous week. Meanwhile, Institute of Supply Management reported a cool down in the US manufacturing activity.
A barrage of macroeconomic updates today in Europe kept the Euro investors busy to adjust their trades. The Spanish labor sector experienced further signs of improvements in December, signaling optimism in the periphery economy. Also, the nation’s annual consumer price inflation remained steady in December. Meanwhile, the Italian annual inflation data remained unchanged in December.
The Sterling inched higher against the USD, as the Nationwide house prices in the UK surged higher than the market expectations in December. Also, the mortgage approvals in the nation increased at a fastest pace in the recent month. Furthermore, the UK’s Prime Minister, David Cameron, stated that the mortgage bids in the nation’s Help-to-Buy scheme inched closer to £1 billion mark.
The Aussie rebounded after it came under pressure in Asian trading hours, following the release of disappointing Chinese services PMI data. Meanwhile, the Bank of Japan (BoJ) Governor stated that the central bank would keep the size of its monetary stimulus unaltered as long as the nation reaches its inflation target.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3649 against the USD, 0.16% lower from the New York close, as a slowdown in the Chinese services activity weighed upon the riskier currency. In key economic news, the number of unemployed people in Spain fell significantly, signaling that the nation’s labor market is recovering. Additionally, the nation’s annual consumer price inflation remained steady at 0.2% for December. During the session, the pair traded at a high of 1.3673 and a low of 1.3628. Yesterday, the EUR traded 0.17% higher against the USD in the New York session, and closed at 1.3671.
The pair is expected to find its first support at 1.3608 and first resistance at 1.3710.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6470 against the USD, 0.12% higher from the New York close, after a report revealed that housing prices in the UK inched higher in December. Additionally, mortgage approvals rose in November, construction activity in the nation also remained strong despite a slowdown in December. In a key development, the UK’s Prime Minister, indicated that, the UK’s government scheme to aid house buying in the nation approached the figure of almost £1 billion. During the session, the pair traded at a high of 1.6475 and a low of 1.6422. Yesterday, the British Pound traded 0.16% lower versus the Dollar in the New York session, and closed at 1.6450.
The pair is expected to find its first support at 1.6401 and first resistance at 1.6550.
USD JPY
The USD is trading at 104.39 against the JPY at 10:40 GMT this morning, 0.38% lower from the New York close. This morning, the BoJ’s Governor, Haruhiko Kuroda, once again indicated that central bank would continue to carry on with its stimulus until the nation reaches its 2% inflation target. During the session, the pair traded at a high of 104.88 and a low of 104.07. In the New York session yesterday, the USD traded 0.56% lower against the JPY, and closed at 104.79.
The pair is expected to find its first support at 103.82 and first resistance at 105.21.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9009 against the Swiss Franc, 0.19% higher from the New York close. The Swissy lost ground, following the release of a mixed bag of macroeconomic data from the Switzerland. The manufacturing PMI report showed deterioration in the manufacturing activity in Switzerland, while the Swiss leading indicator inched higher in the similar period. During the session, the pair traded at a high of 0.9016 and a low of 0.8988. In the New York session yesterday, the USD traded 0.27% lower against the CHF, and closed at 0.8992.
The pair is expected to find its first support at 0.8972 and first resistance at 0.9039.
USD CAD
At 10:40 GMT, the USD is trading at 1.0644 against the CAD, 0.23% lower from the New York close, as traders booked profits after the greenback's recent rise, following a positive US data and the Federal Reserve's decision to begin tapering its stimulus program this year. During the session, the pair traded at a high of 1.0673 and a low of 1.0628. Yesterday, the USD traded 0.23% higher against the CAD in the New York session, and closed at 1.0669.
The pair is expected to find its first support at 1.0594 and first resistance at 1.0686.
AUD USD
The AUD is trading at 0.8989 against the USD, at 10:40 GMT this morning, 0.90% higher from the New York close. However, the gains were limited, as another disappointing macroeconomic update from the nation’s prime trading partner, China, dampened trading prospects between the two nations. During the session, the pair traded at a high of 0.9002 and a low of 0.8885. AUD traded 0.66% higher against the USD in the New York session, and closed at 0.8909.
The pair is expected to find its first support at 0.8886 and first resistance at 0.9047.
Gold
At 10:40 GMT, Gold is trading at $1233.57 per ounce, 0.85% higher from the New York close, heading for the first weekly gain in the recent past, amid expectations that the festive season in China, might support gold prices. This morning, Gold traded at a high of $1238.93 and a low of $1222.10 per ounce. In the New York session yesterday, the yellow metal traded 0.55% higher, and closed at $1223.22.
Gold has its first support at $1217.44 and first resistance at $1244.31.
Silver
Silver is trading at $20.26 per ounce, 1.21% higher from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.28 and a low of $19.98. Silver traded 0.20% higher against the USD in the New York session, and closed at $20.02.
Silver has its first support at $20.02 and first resistance at $20.39.
Crude Oil
At 10:40 GMT, Oil is trading at $95.38 per barrel, 0.10% lower from the New York close, ahead of the weekly inventory update from the Energy Information Administration later during the day. This morning, Oil traded at a high of $95.74 and a low of $95.13. Yesterday, Oil traded 2.27% lower in the New York session, and closed at $95.44, amid a stronger dollar and expectations that Libya would infuse more crude oil in global markets.
It has its first support at $94.08 and first resistance at $97.73.
Economic Snapshot
House prices in UK climbed more than forecasted in December
On a non-seasonally adjusted annual basis, Nationwide house prices in UK rose 8.4% in December, following a rise of 6.5% recorded in the preceding month. Markets were expecting the house prices to rise 7.1% in December. On a seasonally adjusted monthly basis, Nationwide house prices in UK increased 1.4% in December, compared to an upwardly revised 0.7% increase in the previous month.
UK net lending climbed at a slower pace in November
Net lending to individuals in the UK increased to £1.5 billion in November, compared to net lending of £1.7 billion recorded in the previous month. Markets were expecting net lending to individuals to increase to £2.0 billion in November.
UK mortgage approvals climbed more than anticipated in November
The number of mortgage approvals for house purchases in the UK climbed to a level of 70.8 K in November, higher than market expectations of a level of 69.7 K and compared to a revised reading of 68.0 K reported in the previous month.
UK construction PMI fell less than anticipated in December
The construction PMI in UK declined to a reading of 62.1 in December, from a reading of 62.6 in the previous month. Markets had expected the index to fall to a reading of 62.0 in December.
UK M4 money supply advanced at a faster pace in November
On an annual basis, M4 money supply in the UK rose 2.7% in November, compared to a revised 2.4% increase in the previous month. On a monthly basis, M4 money supply in the UK remained flat in November, compared to a 0.1% increase in the previous month.
UK net consumer credit advanced less than expectations in November
The Bank of England reported an increase of £0.6 billion in the UK's net consumer credit in November, compared to a rise of £0.5 billion recorded in the previous month. Markets were expecting net consumer credit to rise by £0.7 billion in November.
Euro-zone’s M3 money supply climbed in line with market expectations in November
On an annual basis, M3 money supply in the Euro-zone rose 1.5% in November, in line with market expectations and compared to a rise of 1.4% recorded in the previous month. Meanwhile, on an annual basis, private sector loans in the Euro-zone fell 2.3% in November, more than market expectations of 2.0% drop and following a revised decrease of 2.2% recorded in the previous month.
Italian consumer prices rose less than forecast in December
On a monthly basis, the preliminary consumer price index (CPI) in Italy rose 0.2% in December, against the market expectation for a rise of 0.4% and after recording an upwardly revised 0.3% drop in the previous month. On an annual basis, the CPI gained 0.7% in December, following an upwardly revised gain of 0.7% in the previous month.
Spain CPI remained flat in December
On an annual basis, Spain’s preliminary consumer price index (CPI) rose 0.2% in December, compared to a similar rise in the previous month. Likewise, on an annual basis, Spain’s preliminary harmonized consumer price (HICP) index rose 0.3% in December, lower than market expectations and compared to a similar rate recorded in the previous month.
Unemployment in Spain fell further in December
The Ministry of Employment reported that number of people unemployed in Spain dropped by 107.6 K in December, compared to a drop of 2.5 K reported in the previous month.
Swiss KOF leading indicator increased more than anticipated in December
The KOF leading indicator in Switzerland advanced to a level of 1.95 in December, higher than market expectation of a level of 1.91 and compared to a reading of 1.85 reported in the preceding month
Swiss SVME PMI dropped more than expected in December
The SVME Purchasing Managers’ Index (PMI) in Switzerland dropped to reading of 53.9 in December, from a reading of 56.5 in the previous month. Markets had expected the index to fall to 56.2 in December.
Chinese official non-manufacturing PMI eased in December
Happy pips to all.
