Forex Market Update
The US dollar continued its winning streak against its key peers this morning, as positive domestic data and mixed clues from the US Federal Reserve’s (Fed) regional Presidents came as a blessing for the greenback.
The San Francisco Fed President, John Williams, yesterday indicated that the central bank is expected to completely cease its ultra loose monetary policy by the end of the current year. Meanwhile, Fed’s regional President from Boston opined that the central bank should not hurriedly roll back its monetary policy.
Separately, data released yesterday in the US indicated that the country's trade deficit narrowed unexpectedly, fuelling hopes for more sustained recovery down the road. Moving forward, the release of the minutes of the Fed’s December meeting is likely to keep investors on their toes in today’s market action, as it would help in evaluating how quickly the central bank intends to bring in further changes in its bond purchases. Also, the ADP jobs report would attract significant market attention.
In a noteworthy development, the International Monetary Fund’s Managing Director, Christine Lagarde voiced to upgrade the global growth outlook in the coming weeks.
The Euro is trading in the red against the greenback, as unemployment in the Euro-zone remained stuck at its record high of 12.1% in November with 19.2 million of people without work. However, the losses were kept in check as the German factory orders and Euro-zone’s retail sales rebounded in November.
Meanwhile, the UK Pound ticked higher against the USD in today’s session despite the release of downbeat domestic housing market report earlier today that showed an unexpected fall in house prices in the UK for December.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3587 against the USD, 0.22% lower from the New York close, despite a rebound in Euro-zone’s retail sales and German factory orders data in November. In other economic news, German trade surplus widened less than market expectations in November. Meanwhile, unemployment in the Euro-zone remain unchanged in the similar period. The Euro also came under pressure as investors remained cautious ahead of the FOMC minutes for further details on the committee's December decision to trim the $85-billion bond-buying program by $10 billion. During the session, the pair traded at a high of 1.3636 and a low of 1.3584. Yesterday, the EUR traded 0.19% lower against the USD in the New York session, and closed at 1.3617.
The pair is expected to find its first support at 1.3562 and first resistance at 1.3635.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6420 against the USD, 0.10% higher from the New York close. However, the gains were limited as Halifax house prices in the UK dropped unexpectedly in December, while the British Retail Consortium’s shop price index dropped further in December. During the session, the pair traded at a high of 1.6433 and a low of 1.6376. Yesterday, the British Pound traded 0.06% lower versus the Dollar in the New York session, and closed at 1.6403.
The pair is expected to find its first support at 1.6383 and first resistance at 1.6449.
USD JPY
The USD is trading at 104.79 against the JPY at 10:40 GMT this morning, 0.18% higher from the New York close. The JPY continued to lose ground amid a light economic calendar in Japan. The Yen traders would closely focus on the release of the Fed’s minutes later during the day to evaluate the trend in the pair. During the session, the pair traded at a high of 105.13 and a low of 104.59. In the New York session yesterday, the USD traded 0.13% higher against the JPY, and closed at 104.60.
The pair is expected to find its first support at 104.37 and first resistance at 105.17.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9103 against the Swiss Franc, 0.14% higher from the New York close. The Swiss Franc traders are expected to track global macroeconomic data points for placing their trades in the pair. During the session, the pair traded at a high of 0.9111 and a low of 0.9076. In the New York session yesterday, the USD traded 0.24% higher against the CHF, and closed at 0.9090.
The pair is expected to find its first support at 0.9069 and first resistance at 0.9124.
USD CAD
At 10:40 GMT, the USD is trading at 1.0810 against the CAD, 0.42% higher from the New York close. During the session, the pair traded at a high of 1.0830 and a low of 1.0757. Yesterday, the USD traded 0.67% higher against the CAD in the New York session, and closed at 1.0765. The Loonie lost ground after the Canadian purchasing activity unexpectedly went in to the contraction territory in December. Moreover, an unexpected surge in the nation’s trade deficit in November also pressurized the Loonie.
The pair is expected to find its first support at 1.0718 and first resistance at 1.0866.
AUD USD
The AUD is trading at 0.8924 against the USD, at 10:40 GMT this morning, tad lower from the New York close. On the economic data front, Australia’s foreign reserves shrank in December. During the session, the pair traded at a high of 0.8939 and a low of 0.8901. AUD traded marginally lower against the USD in the New York session, and closed at 0.8925.
The pair is expected to find its first support at 0.8897 and first resistance at 0.8947.
Gold
At 10:40 GMT, Gold is trading at $1227.11 per ounce, 0.38% lower from the New York close, as hawkish outlook from the Fed’s regional Presidents continued to support the greenback. Traders now awaits preliminary ADP jobs data later today ahead of Friday's numbers, and the release of the minutes of the Fed's latest policy meeting at 1900 GMT, which will shed light on the Fed's decision to taper at the December meeting. This morning, Gold traded at a high of $1232.64 and a low of $1221.44 per ounce. In the New York session yesterday, the yellow metal traded 0.43% lower, and closed at $1231.73.
Gold has its first support at $1218.77 and first resistance at $1238.11.
Silver
Silver is trading at $19.57 per ounce, 1.51% lower from the New York close, at 10:40 GMT this morning, amid broad based strength of the US dollar. This morning, Silver traded at a high of $19.88 and a low of $19.46. Silver traded 0.72% lower against the USD in the New York session, and closed at $19.87.
Silver has its first support at $19.30 and first resistance at $19.98.
Crude Oil
At 10:40 GMT, Oil is trading at $93.76 per barrel, 0.20% lower from the New York close, as severe climatic conditions in the US and Canada forced many oil fields to remain shut. Moreover, civil unrest in Sudan also supported crude oil prices. Investors also await the weekly inventory update from the West’s prime oil watchdog, the Energy Institute Administration, later today. This morning, Oil traded at a high of $94.18 and a low of $93.67. Yesterday, Oil traded 0.18% lower in the New York session, and closed at $93.93. The American Petroleum Institute reported a drop of 7.3 million barrels in the US crude oil stock piles for the week ended 3 January.
It has its first support at $93.33 and first resistance at $94.20.
Economic Snapshot
UK Halifax house price index fell unexpectedly in December
Halifax house price index in the UK fell 0.6% on a monthly basis in December, following a revised rise of 0.9% recorded in the preceding month. Markets were expecting Halifax house prices to rise 0.9% in December. On an annual basis, Halifax house prices in the UK rose 7.5% for the period of October to December, compared to a 7.7% rise for the previous three months.
BRC shop price index in the UK dropped in December
On an annual basis, the BRC shop price index in the UK dropped 0.8% in December, compared to a 0.3% decrease in the preceding month.
Euro-zone unemployment rate remained unchanged in November
The unemployment rate in the Euro-zone remained unchanged at 12.1% in November, in line with market expectations.
Euro-zone retail sales advanced more than forecasted in November
On a monthly basis, retail sales in the Euro-zone rose 1.4% in November, after recording a downwardly revised drop of 0.4% in the previous month. Market had expected retail sales to rise 0.1% in November. On an annual basis, retail sales in the Euro-zone climbed 1.6% in November, compared to a downwardly revised decrease of 0.3% reported in October.
German factory orders rebounded more than 3expected in November
On a monthly basis, factory orders in Germany rose 2.1% in November, compared to an upwardly revised fall of 2.1% recorded in the previous month. Markets had expected German factory orders to rise 1.5% in November. On a non seasonally adjusted annual basis, factory orders in Germany climbed 6.8% in November, after recording an upwardly revised 2.0% increase in the previous month.
German current account surplus widened more than expected in November
Germany posted a non-seasonally adjusted current account surplus of €21.6 billion in November, compared to a revised surplus of €18.8 billion recorded in the previous month. Markets had expected Germany’s current account surplus to widen to €19.3 billion in November.
German trade surplus widened less than forecasts in November
On a calendar and seasonally adjusted basis, trade surplus of Germany increased to €17.8 billion in November, from a revised surplus of €16.7 billion recorded in the previous month. Markets had expected Germany’s trade surplus to increase to €18.0 billion in November.
Italy unemployment rate rose more than expected in November
The preliminary unemployment rate in Italy rose to 12.7% in November, compared to a rate of 12.5% reported in October. Markets were expecting Italy’s unemployment rate to rise to 12.6% in November.
Australia foreign exchange reserves decreased in December
Happy pips.
