Forex Market Update
This morning the greenback stood firm against its key peers. However, it registered losses in the previous session as the confirmation of Janet Yellen, having a dovish outlook, as the next Chair Person of the US Federal Reserve (Fed) pressurized the dollar. Also, the release of a mixed bag of macroeconomic data from the US left the greenback trade in the red.
A report published by the Institute of Supply Management revealed that the services sector in the US experienced a slowdown in December. Meanwhile, factory orders in the US rebounded at a faster pace in November. Today’s market action is expected to move around speeches from a couple of Fed’s policy makers, who may help investors to gauge what they should expect from the central bank in its future meetings.
The Euro is trading higher this morning, after German unemployment unexpectedly fell in December, bolstering hopes that domestic consumption could lift growth in Europe's biggest economy. Meanwhile, nation’s retail sales saw a spectacular recovery in November. However, data released this morning showed that consumer prices across the Euro-zone dipped further below target in December, a development that may prompt the European Central Bank to consider easing monetary policy in coming months.
In UK, the British Chamber of Commerce in its quarterly survey noted that the nation’s economy is expected to improve further in the current year.
Yesterday, the Canadian Finance Minister indicated that the nation’s budget surplus is expected to widen in coming years and that central bank expects the Loonie to weaken in the future.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3641 against the USD, 0.09% higher from the New York close, after data released earlier today showed that the number of people out of work in Germany fell by 15,000 to 2.965 million, the biggest decrease in two years, while the unemployment rate remained steady in December, highlighting that the nation’s labor market remain in fundamentally good shape. Moreover, nation’s retail sales rose more than expected in November, pointing to a strong finish of 2013. During the session, the pair traded at a high of 1.3643 and a low of 1.3611. Yesterday, the EUR traded 0.20% higher against the USD in the New York session, and closed at 1.3629.
The pair is expected to find its first support at 1.3605 and first resistance at 1.3665.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6404 against the USD, tad higher from the New York close. In absence of any macro-economic triggers, traders keenly awaits the Bank of England’s monetary policy meeting later this week, as policymakers gather for their first meeting of 2014, amid mounting expectations that Governor, Mark Carney will change the threshold for considering interest rate hike within months. During the session, the pair traded at a high of 1.6420 and a low of 1.6377. Yesterday, the British Pound traded 0.14% higher versus the Dollar in the New York session, and closed at 1.6402.
The pair is expected to find its first support at 1.6373 and first resistance at 1.6435.
USD JPY
The USD is trading at 104.44 against the JPY at 10:40 GMT this morning, 0.21% higher from the New York close. During the session, the pair traded at a high of 104.62 and a low of 104.17. In the New York session yesterday, the USD traded 0.35% lower against the JPY, and closed at 104.22.
The pair is expected to find its first support at 103.95 and first resistance at 104.88.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9066 against the Swiss Franc, 0.31% higher from the New York close. On the economic front, the foreign currency reserves in Switzerland narrowed less than market expectations in December. During the session, the pair traded at a high of 0.9085 and a low of 0.9036. In the New York session yesterday, the USD traded 0.18% lower against the CHF, and closed at 0.9038.
The pair is expected to find its first support at 0.9029 and first resistance at 0.9094.
USD CAD
At 10:40 GMT, the USD is trading at 1.0692 against the CAD, 0.34% higher from the New York close, ahead of the Canadian trade and manufacturing data to be released later today. During the session, the pair traded at a high of 1.0693 and a low of 1.0651. Yesterday, the USD traded 0.05% higher against the CAD in the New York session, and closed at 1.0656. The Canadian Finance Minister, Jim Flaherty, indicated that Canada might face external pressure to hike its interest rates in the current year. Meanwhile, he also stated that the Loonie is expected to weaken in the future and that nation might have bigger budget surplus in 2015-2016.
The pair is expected to find its first support at 1.0644 and first resistance at 1.0716.
AUD USD
The AUD is trading at 0.892 against the USD, at 10:40 GMT this morning, 0.52% lower from the New York close, after the Australian trade balance continued to report a deficit in November. During the session, the pair traded at a high of 0.8971 and a low of 0.8911. AUD traded 0.20% higher against the USD in the New York session, and closed at 0.8967.
The pair is expected to find its first support at 0.8896 and first resistance at 0.8959.
Gold
At 10:40 GMT, Gold is trading at $1238.7 per ounce, 0.12% higher from the New York close, as escalating expectations that the upcoming festive season in one of the largest consumer of yellow metal, China, might provide some relief to the recent downfall in the gold prices. This morning, Gold traded at a high of $1245.49 and a low of $1235.00 per ounce. In the New York session yesterday, the yellow metal traded tad higher, and closed at $1237.27.
Gold has its first support at $1218.32 and first resistance at $1253.80.
Silver
Silver is trading at $20.09 per ounce, 0.34% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.31 and a low of $20.03. Silver traded 0.66% higher against the USD in the New York session, and closed at $20.16.
Silver has its first support at $19.93 and first resistance at $20.30.
Crude Oil
At 10:40 GMT, Oil is trading at $93.79 per barrel, 0.10% higher from the New York close, ahead of the weekly inventory update from the American Petroleum Institute scheduled later today. However, reports of the reopening of the largest oil field in Libya kept the gains under check. This morning, Oil traded at a high of $93.87 and a low of $93.43. Yesterday, Oil traded 0.68% lower in the New York session, and closed at $93.67, as an unexpected drop in the US non manufacturing gauge dampened the demand prospects from the largest consumer of the crude oil.
It has its first support at $93.13 and first resistance at $94.52.
Economic Snapshot
Euro-zone consumer price inflation advanced less than expected in December
The preliminary consumer price index (CPI) in the Euro-zone rose 0.8% in December, below the market estimates for a rise of 0.9% and compared to a 0.9% rise recorded in November. Additionally, on an annual basis, the core CPI in the Euro-zone rose to 0.7% in December, after recording a gain of 0.9% in November.
Euro-zone producer prices fell less than expected in December
On an annual basis, the producer price index (PPI) in the Euro-zone dropped 1.2% in December, slower as compared to an upwardly revised fall of 1.3% recorded in the preceding month. Market had expected the PPI to fall 1.3% in December. On a monthly basis, the PPI in the Euro-zone fell 0.1% in December, after recording a drop of 0.5% in the previous month.
German unemployment rate remained steady in December
On a seasonally adjusted basis, unemployment rate in Germany remained unchanged at 6.9% in December, compared to the previous month. Meanwhile, the number of people unemployed in Germany fell by 15.0 K in December, compared to revised 9.0 K rise reported in the previous month.
German retail sales rebounded more than expected in November
On a monthly basis, retail sales in Germany increased 1.5% in November, compared to a 0.8% fall recorded in the previous month. Markets had expected retail sales to rise 0.5% in November. On an annual basis, retail sales in Germany rose 1.6% in November, compared to a revised 0.1% decrease recorded in the previous month.
France consumer confidence index climbed more than forecasts in December
The consumer confidence index in France rose to a level of 85.0 in December, compared to a reading of 84.0 recorded in the preceding month. Markets had expected the index to remain steady at a level of 84.0 in December.
Swiss foreign currency reserves fall less than forecasts in December
Foreign currency reserves in Switzerland declined to CHF 435.2 billion in December, compared to revised CHF 435.9 billion reserves recorded in the previous month. Markets were expecting foreign currency reserves to fall to CHF 435.0 billion in December.
Australia trade deficit narrowed more than expected in November
Happy pips.
