Forex Market Update
This morning the greenback cheered the introduction of a bipartisan deal which agreed to finance the nation’s government through September 2014 and further averting the possibilities of yet another US governmental shutdown. The US Dollar also remained supported after another key policymaker of the US Federal Reserve (Fed) from Atlanta backed the possibility of a further policy taper in the central bank’s next policy meeting.
Data released yesterday revealed that the monthly US budget balance posted the first surplus in six years in December, on the back of increased revenue collection from the government’s housing finance authorities. Moving forward, retail sales data is expected to drive today’s market action. Also, speeches from a couple of key policymakers from the Fed, throughout the week, would attract careful attention by the market.
A report released by the Organization for Economic Co-operation and Development, yesterday, noted that the leading economies continue to recover further, supported by growth in the US, UK and Japan.
Meanwhile, one of the European Central Bank’s (ECB) key policymaker opined that Euro-zone’s economic outlook remains improved compared to a year ago. He also dismissed the possibilities of increasing inflation or deflation in the bloc. Meanwhile, industrial production in the common currency bloc rebounded at quicker pace in November.
The Pound trimmed its gains after the nation’s inflation data pointed towards an unexpected easing trend in price pressures for December, raising speculations that the Bank of England might continue to keep its interest at current low levels.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3680 against the USD, 0.07% higher from the New York close, after industrial production in the Euro-zone rebounded at a faster pace in November. In other economic news, French current account deficit shrank in November. During the session, the pair traded at a high of 1.3700 and a low of 1.3648. Yesterday, the EUR traded marginally higher against the USD in the New York session, and closed at 1.3670.
The pair is expected to find its first support at 1.3644 and first resistance at 1.3708.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6407 against the USD, 0.11% higher from the New York close. However, the gains were trimmed as consumer prices in the UK rose at a slower pace in December, raising doubts as to whether the nation would be able to continue its iconic recovery. During the session, the pair traded at a high of 1.6450 and a low of 1.6367. Yesterday, the British Pound traded 0.27% lower versus the Dollar in the New York session, and closed at 1.6389.
The pair is expected to find its first support at 1.6347 and first resistance at 1.6468.
USD JPY
The USD is trading at 103.66 against the JPY at 10:40 GMT this morning, 0.60% higher from the New York close. The JPY lost ground after the Japanese trade deficit continued to widen November. Meanwhile, the nation’s Eco Watchers Survey outlook deteriorated in December. During the session, the pair traded at a high of 103.76 and a low of 102.99. In the New York session yesterday, the USD traded 0.49% lower against the JPY, and closed at 103.04.
The pair is expected to find its first support at 103.09 and first resistance at 104.00.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.9011 against the Swiss Franc, 0.20% higher from the New York close. Investors in the Swiss Franc are expected to shift their focus on the speech by the Swiss National Bank Chief on Thursday, to extract hints on the next set of tools to be deployed by the central bank. During the session, the pair traded at a high of 0.9020 and a low of 0.8985. In the New York session yesterday, the USD traded 0.40% lower against the CHF, and closed at 0.8993.
The pair is expected to find its first support at 0.8981 and first resistance at 0.9046.
USD CAD
At 10:40 GMT, the USD is trading at 1.0897 against the CAD, 0.31% higher from the New York close. During the session, the pair traded at a high of 1.091 and a low of 1.0858. Yesterday, the USD traded 0.47% lower against the CAD in the New York session, and closed at 1.0863. The Loonie found support after the Bank of Canada’s business outlook survey noted the optimism among the nation’s businesses, citing the recent economic developments in its major trading partner, US.
The pair is expected to find its first support at 1.0848 and first resistance at 1.0938.
AUD USD
The AUD is trading at 0.9009 against the USD, at 10:40 GMT this morning, 0.45% lower from the New York close. During the session, the pair traded at a high of 0.9060 and a low of 0.9002. AUD traded 0.09% lower against the USD in the New York session, and closed at 0.9050.
The pair is expected to find its first support at 0.8978 and first resistance at 0.9064.
Gold
At 10:40 GMT, Gold is trading at $1248.90 per ounce, 0.33% lower from the New York close, amid profit booking following a recent price rise. This morning, Gold traded at a high of $1257.00 and a low of $1247.95 per ounce. In the New York session yesterday, the yellow metal traded 0.50% higher, and closed at $1252.99.
Gold has its first support at $1242.82 and first resistance at $1255.99.
Silver
Silver is trading at $20.27 per ounce, 0.70% lower from the New York close, at 10:40 GMT this morning, amid a broadly higher greenback. This morning, Silver traded at a high of $20.49 and a low of $20.24. Silver traded 1.47% higher against the USD in the New York session, and closed at $20.42.
Silver has its first support at $19.99 and first resistance at $20.52.
Crude Oil
At 10:40 GMT, Oil is trading at $92.04 per barrel, 0.50% higher from the New York close, ahead of the weekly inventory update from the American Petroleum Institute, slated to release later in the day. Investors would also focus upon the US retail sales data for determining the trend in the commodity. This morning, Oil traded at a high of $92.33 and a low of $91.50. Yesterday, Oil traded 0.56% lower in the New York session, and closed at $91.57.
It has its first support at $91.52 and first resistance at $92.47.
Economic Snapshot
UK consumer price index advanced less than expected in December
On an annual basis, consumer price index (CPI) in UK rose 2.0% in December, compared to a 2.1% rise recorded in the preceding month. Markets had expected the CPI to rise 2.1% in December.
UK ONS house price index advanced at a slower pace in November
On an annual basis, house price index in the UK rose 5.4% in November, compared to a 5.5% increase recorded in the preceding month. Market had expected the house price index to rise 5.9% in November.
UK retail price index increased in line with market expectations in December
On a monthly basis, the retail price index in the UK increased 0.5% in December, compared to a 0.1% rise recorded in the previous month.
UK input producer prices unexpectedly climbed in December
On a non-seasonally adjusted monthly basis, the producer price index (PPI) input rose 0.1% in December, compared to a 0.7% decrease recorded in the previous month. Markets had expected the PPI input to drop 0.2% in December. Additionally, the non-seasonally adjusted monthly output PPI in UK remained flat in December, compared to a 0.2% fall recorded in the previous month.
Euro-zone industrial production advanced more than forecast in November
On a monthly basis, industrial production in the Euro-zone rose 1.8% in November, following an upwardly revised fall of 0.8% recorded in the preceding month. Market had expected the industrial production to rise 1.4% in November.
German WPI fell less than forecasts in December
On an annual basis, the wholesale price index (WPI) in Germany declined 1.8% in December, compared to a 2.2% drop recorded in the previous month. Markets were expecting the wholesale price index to fall 1.9% in December.
French current account deficit narrowed in November
Current account deficit in France narrowed to €1.9 billion in November, compared to a revised deficit of €2.0 billion recorded in the previous month.
French EU norm CPI advanced less than market expectations in December
On an annual basis, EU normalized consumer price index in France climbed 0.8% in December, slower than market estimate of a 0.9% increase and following a 0.8% rise recorded in the previous month.
Italian final annual CPI climbed in line with the preliminary estimate in December
On an annual basis, the final consumer price index (CPI) in Italy rose 0.7% in December, in line with the preliminary estimate and compared to a 0.7% rise recorded in the previous month. The final yearly EU harmonized CPI in Italy increased 0.7% in December, compared to a similar rise recorded in the previous month.
US lawmakers agreed to a spending deal
The US House and Senate lawmakers agreed upon a $1.01 trillion spending deal that would fund the US government through September 30, 2014. The deal is aligned with the guidelines agreed on by Congressional leaders in December 2013.
Japan Eco Watchers Survey outlook fell in December
Happy pips.
